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SDLT additional rate question

i think it's a no brainer but not sure -

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Hi. Legislation is either badly drafted or too complex or incomplete and I was wondering if someone could help. A person disposes of his PPR 10 years ago and since then lives in parents' accommodation. Clearly if you look at the replacement of main residence rules, he has to pay the 3% surcharge because the disposal was more than 3 years before the purchase of the new main residence and he did not live in the old residence at any point within the  3 years before the purchase of the new dwelling. Note: the person has 2 BTL but he never lived in them. I believe that this doesnt fall within the replacement of main residence rules at all and that it should be treated as purchase of  main residence (albeit not fist time purchase) and hence not be subject to the 3% additonal SDLT. Any ideas from others' experience would be highly appreciated and thanked for.

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Psycho
By Wilson Philips
10th Jan 2020 10:35

I would say that the legislation is relatively clear.

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Replying to Wilson Philips:
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By Tax Dragon
10th Jan 2020 10:43

Relative to the question?

If you didn't have to pay the 3% because you hadn't replaced a main residence within three years (because the legislation doesn't say so), but you wouldn't if you had (because it does) [I think that's what's been suggested], then when would you pay the 3%?

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neand
By neanderthal
10th Jan 2020 10:41

so, since the legislation is clear, would you say that the above trasanction falls within the additional 3% or not?

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Replying to neanderthal:
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By Tax Dragon
10th Jan 2020 10:46

What does https://www.tax.service.gov.uk/calculate-stamp-duty-land-tax/#/intro give you?

Use legislation rather than these tools where they disagree, but the tools are still useful.

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Replying to neanderthal:
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By Justin Bryant
10th Jan 2020 10:48

Yes (obviously).

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Replying to Justin Bryant:
neand
By neanderthal
10th Jan 2020 11:01

yes to what?

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Replying to neanderthal:
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By Tax Dragon
10th Jan 2020 11:03

FFS. Yes to the 3% being due.

Footnote: Wilson, Justin and Dragon publicly agree.

All it took to bring this unlikely peace and harmony was a caveman in a suit.

Next stop Trump and... I was going to say Khomeini, but it could be Trump and anyone.

And where were you when your country needed you in the great Brexit debate?!

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Replying to Tax Dragon:
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By Tax Dragon
10th Jan 2020 11:24

Tax Dragon wrote:

I was going to say Khomeini

Which would have been stupid (must be catching). Khamenei might have made sense. But I didn't say either. (Unlike the legislation, which imposes the charge unless it unimposes it. The 'gap' you noticed means the charge applies.)

Apologies for any offence, BTW. It's just January joshing.

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Replying to Tax Dragon:
neand
By neanderthal
10th Jan 2020 11:25

is there a need for sarcasm and calling names here? i only asked a question i didnt know the answer and which seems pretty unreasonable for someone to pay the 3% if he didnt have a main residence for 10 years when someone who had one yesterday can avoid it. or do you knwo everything?

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Replying to neanderthal:
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By Tax Dragon
10th Jan 2020 11:39

The rules here are utterly stupid, I agree with you.

Any sarcasm (was there any?) would have been aimed a bit at Wilson and Justin but mostly at Dragon. Name-calling? "Caveman in a suit"? Yours is (and has long been) one of my favourite avatars on this site. [It's deeply sad to have favourite avatars, I know... one of the reasons I aim sarcasm at myself on a fairly regular basis.]

By way of balance, not only had I apologised before you commented, but I am the only respondent that has actually explained the legislation.

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Replying to Tax Dragon:
Psycho
By Wilson Philips
10th Jan 2020 12:37

I also agree that the rules are, on the face of it, stupid (but nevertheless quite clear). And that it would seem sensible just to exclude the additional charge in respect of all main residence acquisitions. However, I’m sure that this must have been considered, and if all such purchases were to be excluded there would be significant scope for avoidance.

Since, however, there is already special treatment for first-time buyers I don’t see why there couldn’t also be an exclusion from the additional charge in respect of the first main residence. And “first” could be defined in terms of not having owned a main residence for x years.

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Replying to neanderthal:
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By Justin Bryant
10th Jan 2020 11:14

"so, since the legislation is clear, would you say that the above trasanction falls within the additional 3% or not?" (obviously).

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By Payroll Pete
10th Jan 2020 12:06

Yes the 3% applies
and yes it does seem unfair in this case, but that's the way it's drafted

one way around it is buy a wreck - 3% surcharge does not apply if the property is uninhabitable

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By The Dullard
10th Jan 2020 12:40

I am also of a concurrent disposition. The legislation is clear and the 3% applies.

This was, in fact, one of the cases that the CIOT specifically identified as being inequitable when the legislation was originally published.

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Replying to The Dullard:
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By Tax Dragon
10th Jan 2020 13:01

When I said "stupid", I meant "ine… inequi… inequitable".

But I didn't know how to spell it. (Thank you.)

It's one of many such ineq… such stupidnesses.

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Replying to The Dullard:
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By Coops
10th Jan 2020 14:18

Not sure if it helps to say this, but if the new main residence had been purchased on or before 26 November 2018 then the 3% charge would not have applied, as there was a transitional rule which said that you were OK as long as you had previously disposed of a previous main residence at any time, and had not already purchased another new main residence during the interim period.

I think the reason for this was to give people a chance to purchase a main residence without triggering a charge during the first few years of the new rules.

This adds support to the views that the 3% charge now applies.

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