I am in the process of buying a new home in Birmingham. I also own a buy-to-let property in Southport. I disposed of my share in the old marital home (also in Birmingham) to my now ex-wife in December 2022. I will be buying within the three-year replacement limit, but I actually movedout of that property into rented accommodation a year earlier. Will I have to pay a higher rate of stamp duty land tax (SDLT) on my new purchase as I was not living there within the three-year period, or is there some exception to this rule where divorce or separation is involved?  

Arthur Weller replies:  

What you have written about having to pay the extra 5% SDLT surcharge is correct. See HMRC’s Stamp Duty Land Tax Manual at SDLTM09800. On the one hand, ‘In the three-year period preceding the purchase of the new property, the purchaser (or the purchaser's spouse or civil partner at the time) must have disposed of a major interest in another dwelling (the ‘old property’) [FA 2003, Sch 4ZA, para 3(6) (b)]. This is the three-year disposal rule.’ Regarding this condition, you are OK. But it also states, ‘The purchaser must have lived in the old property as the purchaser's only or main residence at some point in the three-year period preceding the date of the purchase of the new property [para 3(6) (c)]. This is the three-year occupation rule.’ Unfortunately, you haven't fulfilled this condition. There are special rules that apply in a situation of divorce (see SDLTM09797), but they don't apply in your situation.