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Where Taxpayers and Advisers Meet

SDLT - getting different answers!

sealives
Posts:3
Joined:Thu Jan 13, 2022 3:09 pm
SDLT - getting different answers!

Postby sealives » Thu Jan 13, 2022 3:23 pm

My son inherited some money 3 years ago and bought a BTL flat, which he has let out since purchase (not to family); he has never lived in the property.
He has lived with us, his parents during that time.
He now wants to buy his own property, and the question around SDLT has arisen. The mortgage advisor seems to think that because he has never had a 'main residence' the 2nd dwelling premium would not apply. The solicitor thinks different, so I phoned a tax advisor and they said hmm, not sure as this is slightly unusual!

Anyone able to offer a definitive answer?

Thanks in advance.

AGoodman
Posts:1418
Joined:Fri May 16, 2014 3:47 pm

Re: SDLT - getting different answers!

Postby AGoodman » Fri Jan 14, 2022 2:08 pm

Not particularly unusual.

He will have to pay the additional 3% as he already owns another property. If he sells the BTL within three years of buying his home, he can recover the extra SDLT.

sealives
Posts:3
Joined:Thu Jan 13, 2022 3:09 pm

Re: SDLT - getting different answers!

Postby sealives » Sat Jan 15, 2022 7:27 pm

Thank you for your reply. It is as I thought, but nice to know that he could reclaim later if he sells the BTL.
If he does a 100% equity transfer to me within 3 years, is that considered to be selling?

maths
Posts:8430
Joined:Wed Aug 06, 2008 3:25 pm

Re: SDLT - getting different answers!

Postby maths » Sun Jan 16, 2022 10:01 pm

Disagreeing with AG is a dangerous game but I'm not sure there is any possibility of the 3% surcharge payable on a purchase of the new home when a sale of the BTL occurs within a three year period post purchase.

A refund applies where a new main residence is purchased prior to a sale of an existing main residence within the three year period.

bd6759
Posts:3745
Joined:Sat Feb 01, 2014 3:26 pm

Re: SDLT - getting different answers!

Postby bd6759 » Mon Jan 17, 2022 1:34 am

Agree with maths. The 3% cannot be reclaimed if the BTL is sold. The reclaim only applies if a residence is sold.

AGoodman
Posts:1418
Joined:Fri May 16, 2014 3:47 pm

Re: SDLT - getting different answers!

Postby AGoodman » Mon Jan 17, 2022 12:12 pm

True - I disagree with myself...

sealives
Posts:3
Joined:Thu Jan 13, 2022 3:09 pm

Re: SDLT - getting different answers!

Postby sealives » Wed Jan 19, 2022 12:50 pm

Thank you very much for you replies - If I may, 2 questions.

If a 100% transfer of equity takes place (no mortgage, single person on the deeds, BTL property, no money changes hands), does that transaction attract SDLT?

Does the event attract CGT?

Thanks in advance

bd6759
Posts:3745
Joined:Sat Feb 01, 2014 3:26 pm

Re: SDLT - getting different answers!

Postby bd6759 » Thu Jan 20, 2022 12:33 am

No consideration given - no SDLT

It is still a disposal and potentially liable to CGT based on the market value.


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