Any tax / stamp duty experts on here?

[kippax]

I'm moving house downsizing due to death of my wife & have been told off my solicitor that I will have to pay over £5k in stamp duty instead of £1200 due to holiday home I own in portugal night with life insurance money. (£205k house purchase)

Apparently it's classed as second home so I have to pay higher rate🙄

Is there anything that can be done to reduce or combat this? Seems unfair that my honesty in declaring has cost me £4K.

[randlemarcus]

Why does it seem unfair?

Second homes are second homes, and there is a clear "if you have another home, you pay more stamp duty" rule.

You could sell the second home, then downsize, and avoid the additional stamp duty if you wanted.

[kippax]

randlemarcus said:

Why does it seem unfair?

Second homes are second homes, and there is a clear "if you have another home, you pay more stamp duty" rule.

You could sell the second home, then downsize, and avoid the additional stamp duty if you wanted.

Thanks for your helpful response Cockwomble.

[Vixpy1]

As Marcus says, the rules are quite clear, if you have a second home, you pay more stamp duty. Regardless of where the property is.

Its a silly rule, as i think the extra stamp duty should only apply to investment or holiday homes, but rules is rules

[kippax]

Thanks seemed strange but fair enough.

[Mandat]

I didn't realise that the extra stamp duty was also payable on foreign property.

Out of interest, how would HMRC know about a foreign property, if it was not disclosed by the owner?

[andye30m3]

I was under the impression that you shouldn't pay the extra stamp duty if the new house is going to be your main residence

https://www.gov.uk/government/consultations/consul...

[CaptainSlow]

andye30m3 said:

I was under the impression that you shouldn't pay the extra stamp duty if the new house is going to be your main residence

https://www.gov.uk/government/consultations/consul...

This is correct. OP, you may wish to get a better solicitor.

[kippax]

Thank you I'll get them to look into it.

Solicitor did say if I hadn't told them there was no way of hmrc knowing but I was honest when filling out paperwork.

[Vixpy1]

They be right

http://www.zoopla.co.uk/discover/buying/q-a-new-3-...

I did'nt know that

[Muncher]

Acquisition of single dwelling: individual

Where the buyer is an individual who acquires a single dwelling, there is a higher rates transaction that is subject to the supplemental 3% SDLT charge if all of the following conditions are satisfied:

The main subject-matter of the transaction consists of a major interest in a single dwelling (new dwelling).
The chargeable consideration for the transaction is £40,000 or more.
On the effective date of the transaction, the new dwelling is not subject to a lease with an unexpired term of more than 21 years.

At the end of the day on which the effective date of the transaction falls:
the buyer has a major interest in a dwelling (existing dwelling) other than the new dwelling;
that major interest has a market value of £40,000 or more; and
that major interest is not subject to a lease with an unexpired term of more than 21 years.
The new dwelling is not a replacement for the buyer's only or main residence.

[Oi_Oi_Savaloy]

I've nothing to add except to say I'm sorry for your loss.

[lost in espace]

Oi_Oi_Savaloy said:

I've nothing to add except to say I'm sorry for your loss.

What a nice post.

[Rangeroverover]

You are replacing your main residence so you will not be due the extra 3%, I'm shocked at the lack of knowledge some solicitors have on stamp duty.

If you want to be sure call HMRC and ask them, be clear with them that you are selling your main residence of x years and will be buying a new main residence

[kippax]

Oi_Oi_Savaloy said:

I've nothing to add except to say I'm sorry for your loss.

Thank you Cancer is indeed a bd 42 is no age.

[worsy]

Q. What if the home I am buying will be my main residence?

If the home you are buying replaces your main residence, you will not be liable for the 3% surcharge, even if you own an additional property/properties (such as a second home, or let flat) at the same time. This example is straight from the Government's consultation document:

"A owns both a main residence and a second home. She sells her main residence and purchases a new one. Although she has two properties at the end of the day of the transaction, she has replaced her main residence so the higher rates will not apply."

But replacing your main residence means the last one will need to be disposed of (eg, SOLD or GIFTED). If you are moving out of rented accommodation or, say, your parents' home this will NOT count as disposing of your main residence as you are not an owner or part-owner of that property.


from the link posted above

And from the gubberment website

https://www.gov.uk/government/consultations/consul...

[Rangeroverover]

Just to add, the 18 months in the last box should now read 36 months

[kippax]

andye30m3 said:

I was under the impression that you shouldn't pay the extra stamp duty if the new house is going to be your main residence

https://www.gov.uk/government/consultations/consul...

You sir along with other people posting have just saved me £4K as Solicitor has admitted she was wrong.

I owe you several pints of your favourite tipple

[Durzel]

kippax said:

Thank you Cancer is indeed a bd 42 is no age.

Echoing the above poster, sorry for your loss.. as you say 42 is no age.

[johnfm]

kippax said:

andye30m3 said:

I was under the impression that you shouldn't pay the extra stamp duty if the new house is going to be your main residence

https://www.gov.uk/government/consultations/consul...

You sir along with other people posting have just saved me £4K as Solicitor has admitted she was wrong.

I owe you several pints of your favourite tipple

Sorry to hear of your loss. You're right - 42 is no age at all.

Re: your piss poor solicitor, I would suggest you review your solicitor's bill and reduce to reflect her ineptitude.

Personally, I think she needs reporting to the SRA!