Reply to: Question on stamp duty

[MarillionFan]

What if the home I am buying will be my main residence?
'Main residence' refers to the home you live in, not just a property you own. And which home is your main residence will be judged as a matter of 'fact' (for example, where you spend most nights, where the rest of your family lives, where you are registered to vote and where you are signed up to local doctors and dentists). You won't be able to 'elect' a main residence as you can for the purposes of Capital Gains Tax.
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 (or at least a 'major interest' in it) 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.

Read more at Q&A: The 3% Stamp Duty surcharge on second homes - Zoopla

<**** OFF> Mordy + Atw </**** OFF>

[d000hg]

It seems to catch a lot of people out. Both my estate agent and mortgage adviser (who is very good, not the type to make mistakes) warned me that since we own our old BTL property, we'd have to pay the 3% and reclaim it. One could argue it's needlessly complicated...

[MarillionFan]

Yes.

WHS!

Actually , no let me check that as that seems ******* stupid, plus I applied for a mortgage in principle today forgetting all the other BTL houses I own.

Doogies post seems correct, but let me confirm.

[AtW]

Anyway, if your figures are correct it still won't apply unless OH has his eyes on something in the £2m+ bracket. Another reason to get expert advice, which I'm not sure is forthcoming on here.

Yes, that's true - though in London a dog house would cost at least as much

[Mordac]

" The main features of the proposed legislation will affect properties which are valued at more than £2 million and which are owned by “non-natural persons”. (This is a reference to foreign companies, partnerships, funds and the like, not to persons with strange personal habits.)

1. An annual charge of a minimum of £15,000 and a maximum of £140,000 depending on value. The new tax is called Annual Residential Property Tax (ARPT). "

How to escape the offshore property tax trap - Telegraph

At £20 mln the charge is particularly high.

Trust me to believe something in the Graun.
Anyway, if your figures are correct it still won't apply unless OH has his eyes on something in the £2m+ bracket. Another reason to get expert advice, which I'm not sure is forthcoming on here.

[AtW]

That's on properties over £20m.

" The main features of the proposed legislation will affect properties which are valued at more than £2 million and which are owned by “non-natural persons”. (This is a reference to foreign companies, partnerships, funds and the like, not to persons with strange personal habits.)

1. An annual charge of a minimum of £15,000 and a maximum of £140,000 depending on value. The new tax is called Annual Residential Property Tax (ARPT). "

How to escape the offshore property tax trap - Telegraph

At £20 mln the charge is particularly high.

[Mordac]

Offshore companies have to pay annual fees now, in some cases £210k per year!

That's on properties over £20m. And that's only if they choose to keep the individual owner(s) private. Around 200 chose to pay the tax (ATED) rather than declare who actually owns them.

More here: https://www.theguardian.com/uk-news/...nership-secret

[AtW]

Oh you mean a UK business, well yes, who in their right mind would setup a UK business to hold UK property?

Offshore companies have to pay annual fees now, in some cases £210k per year!

[Mordac]

But technically, isn't that a change of ownership and thus itself subject to stamp duty?

You need to speak to a specialist accountant. There are CGT implications, personal tax implications and SD implications. You need to factor in all your circumstances before you decide, but one factor could outweigh the others.

[d000hg]

If you move house, you do NOT pay the additional 3% on the new place provided you never own both the old and new residential houses at the same. If you do own both residential properties for some overlapped period, you must pay the additional 3% but then you get a refund later.



https://www.gov.uk/government/consul...#policy-design

[DimPrawn]

Oh you mean a UK business, well yes, who in their right mind would setup a UK business to hold UK property?

Private Eye | Official Site - the UK's number one best-selling news and current affairs magazine, edited by Ian Hislop

[AtW]

Stamp duty does not apply to businesses.

[DimPrawn]

But technically, isn't that a change of ownership and thus itself subject to stamp duty?

Stamp duty does not apply to businesses.

However, they are talking about making sellers pay stamp duty and not buyers, thus getting a double bite of all existing homes.

They are gonna bleed us dry.

[AtW]

But technically, isn't that a change of ownership and thus itself subject to stamp duty?

Yup.

Plus there is also an opinion that moving your BTL to a Limited company won't prevent that 3% duty:

"Can I avoid the surcharge by setting up a limited company?

A. The Government has a keen eye on preventing tax avoidance with this levy, so you won't be able to escape the surcharge by setting up a limited company for the purpose of buying a home or homes."

Q&A: The 3% Stamp Duty surcharge on second homes - Zoopla

[OwlHoot]

You should probably look at transferring BTLs to a limited company ...

But technically, isn't that a change of ownership and thus itself subject to stamp duty?