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TonyTax
TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15708
Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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I need to know whether I should be paying the higher rate

Customer Question

I need to know whether I should be paying the higher rate stamp duty on my new purchase. My partner has a property that she has never lived in, but rents out, and I am named on a mortgage with my ex-partner. I left the property over 3 years ago and haven't contributed financially at all. I've been living in rented accomodation for this time, but we are due to complete next week and the solicitor has advised this morning that we should be paying the higher rate. I have read an article in both the Telegraph and the Guardian that casts doubts on this. The telegraph mentions a loophole for people who are buying a second home as a main residence, who have also sold a property prior to the SDLT legislation (which I did in 2003)...please can you advise?
Submitted: 2 months ago.
Category: Tax
Expert:  TonyTax replied 2 months ago.

Hi. My name is*****'m looking at your question now and will post my answer or ask for more information here in a short while.

Customer: replied 2 months ago.
This is the article that I read Http://www.telegraph.co.uk/investing/buy-to-let/the-stamp-duty-tax-loophole-that-could-save-buyers-thousands/
Expert:  TonyTax replied 2 months ago.

Thanks. I'll take a look at that. I'm about to start drafting my answer.

Customer: replied 2 months ago.
Happy to just have a written response and will answer any questions on here
Expert:  TonyTax replied 2 months ago.

OK. You don't have to have a phone call.

Customer: replied 2 months ago.
ok thanks..
Expert:  TonyTax replied 2 months ago.

I'm looking at all my reference material now. There are quite a few contradictions but I'm getting there. Are you a part owner of the house you lived in until just over three years ago?

Customer: replied 2 months ago.
We bought it as a joint mortgage, with my ex-partner. She has not been able to have my name removed due to her financial status, but I haven't contributed since I left. So I guess it is classed as joint ownership
Expert:  TonyTax replied 2 months ago.

Thanks.

I'm afraid I think you will be liable for the stamp duty surcharge. With its significant concessions, the government has in my view pretty much trashed the intention of the surcharge which was to simmer down the property market to help people who want to buy houses to live in to get a foothold on the housing ladder but that's just my opinion and is of no consequence.

If you look at paragraphs 1.30 and 1.31 in the consultation results here, it has been announced that those who sold their previous main home (at any time) before 25 November 2015 will have 36 months from 25 November 2015 to buy a new main home and not have to pay the surcharge. If your previous main home had been the one you sold in 2003, you would be able to take advantage of this concession. However, your previous main home is the one you stopped living in just over three years ago and hasn't been sold.

I hope this clarifies things for you but let me know if you have any further questions.

Expert:  TonyTax replied 2 months ago.

Hi.

I'm just following up to find out if my answer helped or if you have any further questions.

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