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taxadvisor.uk
taxadvisor.uk, Chartered Certified Accountant
Category: Tax
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Experience:  FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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Me and my wife bought a buy to let property in Scotland last

Resolved Question:

Me and my wife bought a buy to let property in Scotland last December (2016). We did not have to pay a 2nd property additional stamp duty levy as at the time this was the only property that we owned.
We had this point confirmed by the Scottish Inland Revenue.
We are now buying a property in London which will be our primary residence and our understanding is that we must pay the 3% levy as this will be the 2nd property that we own.
We have two questions:
1) Will our London property automatically qualify as our primary residence - i.e. we won't have to pay any capital gains tax in the future?
2) I believe we can claim this 3% additional levy back if we sell within 3 years? Is this the London property we would have to sell within 3 years or the Edinburgh one or both?
Submitted: 6 months ago.
Category: Tax
Expert:  taxadvisor.uk replied 6 months ago.

Hello and welcome to JustAnswer. I am here to help you. I am reviewing your question and will respond to you shortly.
Many thanks

Expert:  taxadvisor.uk replied 6 months ago.

Thank you for your question..

There are two parts to it

1) If the London property becomes your primary residence then on sale of it in the future all gain would be covered by private residence relief and there would be no CGT payable.

2) You can only claim this 3% additional stamp duty if you were to sell the property in London and buy another property that would then become your main residence.

If the Edinburgh property were to be your main residence when you buy the property in London, then sale of it within 36 months would enable you to get a refund of extra 3% stamp duty you would have to pay when buying the property in London.

More information on this can be found under "if you are replacing your main residence" here

https://www.gov.uk/stamp-duty-land-tax/residential-property-rates

I hope this is helpful and answers your question.

If you have any other questions, please ask me before you rate my service – I’ll be happy to respond.

Customer: replied 6 months ago.
Thanks for your prompt answer.We are likely to be moving to Ireland so we won't be changing primary residences we will just be emigrating - does this mean we can re-claim the £18k? Also we have yet to complete on this purchase do we definitely have to pay this additional 3%?
Expert:  taxadvisor.uk replied 6 months ago.

Thank you for your reply.

As you would be owning two properties at the end of the day, there is no escape from this additional 3% I'm afraid. I have explained circumstances where it would be possible to get a refund at a later date. You would only be able to reclaim if Edinburgh property is deemed your main residence before you complete the purchase and then move to London property and nominate it as your main residence.

I hope this is helpful and answers your question.

taxadvisor.uk and other Tax Specialists are ready to help you
Expert:  taxadvisor.uk replied 6 months ago.

Hi there

Just checking to see if you need further clarification/information or have I answered your question.

Many thanks