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TonyTax
TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15946
Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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Currently I am the sole owner of our main residence that we

Resolved Question:

Currently I am the sole owner of our main residence that we are selling and we jointly purchasing a new main residence. My husband is the sole owner of a property in Manchester, which we are looking to put on the market very shortly. This was bought as his main residence 10 years ago, but we have been living together at my home for 7 years. My husband's property has been rented out, but was not purchased as a “buy to let” and he has not claimed any tax relief on it. We have not sold it earlier as it was in negative equity.
With the stamp duty changes effective 1st April:
- Do we have to pay the extra 3% stamp duty effective 1st April 2016 on the purchase of our new residence because my husband owns another property?
- Can we claim that with the sale of our main residence and purchase of a new main residence we are exempt?
- If we do sell my husband's property within 3 years, can we claim back the extra 3% stamp duty, even though it was not his main residence for the past 7 years?
Submitted: 1 year ago.
Category: Tax
Expert:  TonyTax replied 1 year ago.
Hi. Let me take a look at this and I'll get back to you in a bit.
Customer: replied 1 year ago.
Ok thanks
Expert:  TonyTax replied 1 year ago.
You should refer to the document here, in particular the section headed "Married couples and civil partners" starting at section 2.4 and sections 2.8 to 2.11 inclusive. As a married couple, you can only have one main residence between you for the purposes of the increased rate of stamp duty. This mirrors the situation for Capital Gains Tax purposes. Therefore, as you are replacing your main residence by buying another main residence, you will only have to pay the increased stamp duty if your house is not sold at the same time as the purchase of the new house. If that is the case, so long as the previous main home (your house) is sold within 18 months of the purchase of the new main home, you will be able to claim a refund of the extra stamp duty. It all comes down to what is the main home and it seems clear to me that your house is the main home and that you are replacing it. I hope this helps but let me know if you have any further questions.
Customer: replied 1 year ago.
Thanks Tony. We are actually completing on the sale of our main residence a 3-6 weeks before we complete on our new main residence as some repairs need to be done by the seller. So we won't have to pay the higher rate stamp duty at all?
Expert:  TonyTax replied 1 year ago.
That would be correct. The other property in Manchester doesn't come into it.
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Customer: replied 1 year ago.
Many thanks for your help
Expert:  TonyTax replied 1 year ago.
Thanks. Enjoy your new home.