BTL, CGT, Stamp duty and the 3% surcharge
Discussion
Hi all,
With the 3% stamp duty surcharge for second homes recently coming in, does anyone know if this would be a tax deductible for a CGT calculation?
Stamp duty is an allowable deduction when calculating CGT on BTLs, but does anyone know how the surcharge would be treated? It is clearly a cost of purchase, and if you just had one BTL and a PPR, it would be simple to calculate. However if you already had 2 or more BTLs, and had just bought your first PPR (and therefore paying 3% on the value of your PPR), how would this be deducted?
Just thinking out aloud...
Nick
With the 3% stamp duty surcharge for second homes recently coming in, does anyone know if this would be a tax deductible for a CGT calculation?
Stamp duty is an allowable deduction when calculating CGT on BTLs, but does anyone know how the surcharge would be treated? It is clearly a cost of purchase, and if you just had one BTL and a PPR, it would be simple to calculate. However if you already had 2 or more BTLs, and had just bought your first PPR (and therefore paying 3% on the value of your PPR), how would this be deducted?
Just thinking out aloud...
Nick
The problem I have in the scenario is that the 3% isn’t directly attributable to either BTL 1 or BTL 2. The cost is incurred because the PPR is purchased (and the stamp duty is directly calculated from the cost of this).
Indirectly however, the 3% surcharge arises because of the existence of an existing BTL property.
So when selling either BTL 1 or 2, it would be good to apply the full 3% when one or both are sold. It doesn’t feel right that the whole amount is applied to just one, but also doesn’t seem right to apportion it across both (if this makes sense).
Imo it doesn’t make sense because the tax is calculated on the purchase of the new property which is fine if you currently own a PPR and are buying a BTL, but disproportionate if you own a BTL and are buying your first PPR. An example being if a couple own a flat and buy a larger house, but want to keep the flat as an investment.
Indirectly however, the 3% surcharge arises because of the existence of an existing BTL property.
So when selling either BTL 1 or 2, it would be good to apply the full 3% when one or both are sold. It doesn’t feel right that the whole amount is applied to just one, but also doesn’t seem right to apportion it across both (if this makes sense).
Imo it doesn’t make sense because the tax is calculated on the purchase of the new property which is fine if you currently own a PPR and are buying a BTL, but disproportionate if you own a BTL and are buying your first PPR. An example being if a couple own a flat and buy a larger house, but want to keep the flat as an investment.
I think you're making things more difficult than they actually are. SDLT is calculated on a particular transaction/property so that's the property it's relevant to for CGT calculations.
If someone is later able to go back and get the extra 3% refunded then it's refunded against the duty paid on that property and will reduce the CGT base cost.
If someone is later able to go back and get the extra 3% refunded then it's refunded against the duty paid on that property and will reduce the CGT base cost.
NickXX said:
The problem I have in the scenario is that the 3% isn’t directly attributable to either BTL 1 or BTL 2. The cost is incurred because the PPR is purchased (and the stamp duty is directly calculated from the cost of this).
Indirectly however, the 3% surcharge arises because of the existence of an existing BTL property.
So when selling either BTL 1 or 2, it would be good to apply the full 3% when one or both are sold. It doesn’t feel right that the whole amount is applied to just one, but also doesn’t seem right to apportion it across both (if this makes sense).
Imo it doesn’t make sense because the tax is calculated on the purchase of the new property which is fine if you currently own a PPR and are buying a BTL, but disproportionate if you own a BTL and are buying your first PPR. An example being if a couple own a flat and buy a larger house, but want to keep the flat as an investment.
This is similar to me. Bought 2 BTL’s before the tax. Lived with my brother and paid him rent, bought my first PPR and got charged the extra 3% for having additional properties (my 2 BTL’s). Now looking to move in with my GF so going for an upgrade and the stamp duty payable sucks Indirectly however, the 3% surcharge arises because of the existence of an existing BTL property.
So when selling either BTL 1 or 2, it would be good to apply the full 3% when one or both are sold. It doesn’t feel right that the whole amount is applied to just one, but also doesn’t seem right to apportion it across both (if this makes sense).
Imo it doesn’t make sense because the tax is calculated on the purchase of the new property which is fine if you currently own a PPR and are buying a BTL, but disproportionate if you own a BTL and are buying your first PPR. An example being if a couple own a flat and buy a larger house, but want to keep the flat as an investment.
would I be able to claim back the additional 3% I paid when I bought my first PPR?lewisf182 said:
This is similar to me. Bought 2 BTL’s before the tax. Lived with my brother and paid him rent, bought my first PPR and got charged the extra 3% for having additional properties (my 2 BTL’s). Now looking to move in with my GF so going for an upgrade and the stamp duty payable sucks would I be able to claim back the additional 3% I paid when I bought my first PPR?
I don't think you'd be able to claim any of it back unfortunately, unless you managed to sell both BTLs within the 3 year period. If you're selling your current PPR before buying/at the same time as buying your new one, you won't have to pay the additional 3% on the new purchase. would I be able to claim back the additional 3% I paid when I bought my first PPR?NickXX said:
lewisf182 said:
This is similar to me. Bought 2 BTL’s before the tax. Lived with my brother and paid him rent, bought my first PPR and got charged the extra 3% for having additional properties (my 2 BTL’s). Now looking to move in with my GF so going for an upgrade and the stamp duty payable sucks would I be able to claim back the additional 3% I paid when I bought my first PPR?
I don't think you'd be able to claim any of it back unfortunately, unless you managed to sell both BTLs within the 3 year period. If you're selling your current PPR before buying/at the same time as buying your new one, you won't have to pay the additional 3% on the new purchase. would I be able to claim back the additional 3% I paid when I bought my first PPR?Anybody ever claimed additional stamp back? How difficult and long a process is it?
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