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Where Taxpayers and Advisers Meet

Main residence query

TomCam
Posts: 2
Joined: Thu Oct 31, 2019 1:37 pm

Main residence query

Postby TomCam » Fri Nov 01, 2019 3:18 pm

Hi all. I need some help and advice. I had two properties in my name A and B. Main residence was property A from 2000 until 2019. Property B was bought in 2017.

I sold property A in three months back (Aug-19). I was staying in the property A until it was sold and then moved to property B. I am looking to buy a property to live and to replace my previous main residence (A)with a new house which is likely to happen sometime next year (2020).

In terms of CGT/SLDT my questions are:

a. Can I buy a new property to be shown replacement of previous main residence next year and save extra 3% stamp duty, while staying at property B interim, on the basis of 3 year main residence replacement rule?

b. If I am unable to buy something in next 3 years, does property B becomes the default main residence or can be changed to main residence for CGT purposes?

Thanks
Tom

maths
Posts: 7591
Joined: Wed Aug 06, 2008 3:25 pm

Re: Main residence query

Postby maths » Mon Nov 04, 2019 5:37 pm

For SDLT "intention" plays a key role.

If you purchase property, say, "C" with the intention it is to be your sole/main residence within the 3 year period of selling "A" the 3% charge should not apply re purchase of "C".

It becomes necessary to be able to argue that "B" was never intended to be, nor has it ever become, your sole/main residence. Hopefully, you should be able to argue that at date of purchase of "C" you had no intention of it becoming so. The key to arguing "C" didn't ever become your sole/main residence may be more difficult to argue but owning a property, per se, does not automatically make it a "residence".

TomCam
Posts: 2
Joined: Thu Oct 31, 2019 1:37 pm

Re: Main residence query

Postby TomCam » Tue Dec 03, 2019 9:32 am

hi maths

I was away for a long period so could not response back. Thanks for the advice you have provided, all of which makes pefect sense. Now race is on to find new propety asap.

Regards
Tom


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