Stamp Duty – general confusion over the additional 3% and who has to pay!

Stamp Duty – general confusion over the additional 3% and who has to pay!

It’s nearly two years since the additional 3% stamp duty was brought in on second homes and yet there is still widespread confusion about who has to pay it. In the Money section of the Sunday Telegraph [14th January] they found that “tax advisors, solicitors and even HMRC are giving conflicting advice that leaves thousands of buyers confused as to whether they are liable for the levy”.

Amazingly it goes on to say that what is more if you pay the extra stamp duty no-one at HMRC checks this, so if you have paid too much or paid duty when it is not due then you will not be told and will not be refunded.

Many are not aware of the transitional rule. This is where a buy-to- let owner who sold their principal residence before November 25 2015, the date when the additional stamp duty rate was announced, does not have to pay the extra duty if they complete the purchase of a new main residence on or before November 26 2018!

Couples living together, where one owns a buy-to-let property and the other does not do not have to pay the extra duty if the partner who does not own a property purchases their main residence. The second property will only be taken into account when they are married.

There is a stamp duty land tax calculator provided by HMRC but beware the pitfalls such as the fact that “main residence” and similar terms are not defined clearly!

At Winchester Bourne we work hard to make sure our clients are provided with the best advice. If you would like to know more about our services and how we can help you please email sarah@winchesterbourne.com or call 01962 715671.

 

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