QI have just agreed the sale of my home, where I have lived for the past 20 years, and am buying another property, which I intend to live in as my main residence. I also own 50 per cent of a cottage in France and three investment properties in the UK, one of which is currently being sold.
I’m under the impression that I don’t have to pay the 3 per cent stamp duty surcharge on my home, as I am simply selling my main residence and buying another. The information on HMRC’s website seems to confirm this.
However, my solicitor has now backtracked and has stated that I am liable for the additional 3 per cent.
Please are you able to clarify the rules for me? The additional tax will amount to almost £16,000 – a not inconsiderable amount. I am 70 years old and would like this to be my final move and still have enough money left to enjoy my later years.
The Stamp Duty Land Tax (SDLT) rules apply to married couples as if they are buying the property together, so if you are married and your spouse or civil partner owns an interest in a property anywhere in the world, the position may be different. Assuming this is not the case, then provided the new property is being purchased to replace your main residence, the extra 3 per cent SDLT surcharge will not apply.
This is irrespective of the fact that you are the owner of the investment properties and a part owner of the French cottage. If there is a delay in selling your current home (such that it has not been sold on the day you complete on the new house) then you will need to pay the SDLT surcharge on the purchase of the new house within 14 days of completion. You would, however, be able to claim a refund, provided your old home was sold within 36 months of the new purchase and you made your claim no later than 12 months after the sale.
Stefanie Tremain is a private client adviser specialising in UK tax at accountancy firm Blick Rothenberg