• Stamp Duty Higher Rate

    By Guest on 08th Sep 2023

    Hi if my sister is buying out her ex boyfriend from their main residence, the property is valued at £270,000 but she also has just inherited a 50:50 split of a second property from her late father, does she need to still pay the higher rate sdlt? There are no mortgages on either property

  • 3 Answers

    By Guest on 15/09/2023

    No she shouldn't. Firstly, properties inherited in the last 3 years, where the share inherited is 50% or less, don't count when considering if other properties are owned and secondly, there is an exception from the higher rate surcharge introduced in Sch 11 Finance Act 2018 so that a person acquiring further shares in his or home doesn't pay the higher rate, though they do have to have owned and lived at the property for at least the last 3 years

  • By Guest on 25/09/2023

    Thank you so much for your reply. Her solicitor said she would need to put this information in writing in order to apply for an exemption. They have said they are not able to find it from Sch 11 Finance Act 2018. Is there somewhere else we can get this information from?

  • By Guest on 15/11/2023

    Hi,

    I'm sorry - I've only just seen your reply. It may be that the transaction has completed now and the tax has been paid but this is the relevant section of schedule 11 of the Finance Act 2018 (it's paragraph 3): Exception where purchaser has prior interest in purchased dwelling
    3After paragraph 7 insert—
    “Exception where purchaser has prior interest in purchased dwelling
    7A(1)A chargeable transaction which would (but for this paragraph) fall within paragraph 3 or paragraph 6 does not fall within that paragraph if—
    (a)the purchaser had a major interest (“the prior interest”) in the relevant purchased dwelling immediately before the effective date of the transaction, and
    (b)the relevant purchased dwelling had been the purchaser’s only or main residence throughout the period of three years ending with the effective date of the transaction.

    You can also look at paragraph 7A of Schedule 4ZA Finance act 2003. If the tax has bene paid your sister can still claim a rebate (which has to be done within 12 months of completion). She should call HMRC's stamp taxes helpline in the first instance.

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