My wife and I are in the process of buying a second home in Brighton. I own the primary home, and she lives here, too. Could I nominate the new purchase as a primary home to avoid stamp duty land tax (SDLT) and then change the nomination back to my present house? At that point, would I have to pay outstanding SDLT on the new second home? Or does HMRC let you off it? Our solicitor says we must pay the duty.
Arthur Weller replies:
You are referring to the additional 3% SDLT when one buys a second residential dwelling, and the exemption that applies when one buys a new main residence. However, the exemption that applies when purchasing a new main residence only applies when one disposes of the old main residence. See HMRC’s Stamp Duty Land Tax manual at SDLTM09800. In your scenario, there has been no disposal, so your solicitor is correct.