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Do these circumstances create an SDLT liability?

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Husband and wife moved from Midlands to Oxfordshire in 2019  for work. Rented flat in Oxfordshire. House in Midlands was sold in 2020. They have separated and each is in the process of buying a  house (Market Values £ 310,000 and £ 325,000) in Oxfordshire and both transactions will be finalised before 1 April 2021. Each will own their own house on a shared ownership basis with a local housing association. Each will have the new house as a main residence and be independent of the other in  terms of ownership  and mortgage of the new houses being purchased. Neither owns other properties. 

Given the above, will  SDLT liabilities arise? Please let me know if you need additional information. Thanks in advance for any assistance.

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By Tax Dragon
22nd Jan 2021 06:53

Are you advising both?

What shares under the help-to-buy? SDLT due only on the % bought. (Subsequent purchases t/a linked transactions.)

(Was that the question? It's not especially clear.)

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22nd Jan 2021 11:49

Many thanks for your reply.

Yes, that’s correct.

Shares are 55% and 40% respectively. Since the transactions will be completed before 1 April 2021, is it the case that a market value election can be made to eliminate SDLT, including SDLT on future purchase of remaining tranches?

Most importantly, it has been suggested to me that, because they are married and each will own their own house, there may be a risk that higher rate SDLT could apply and both may have a liability. These transactions are not linked in any way and this is clearly supported by the facts.

I don’t have much experience with SDLT and would appreciate any further observations you may have.

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