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SDLT - Surcharge

Stamp duty - main home being replaced is rented out whilst waiting for a buyer

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A client is looking to move house and has had an offer accepted on a new property. They can, at a stretch, complete the purchase while they wait for their current residence to sell. I have advised them this will result in a 3% surcharge of Stamp Duty Land Tax on the cost of the new main residence as they will own two properties. However, this will be recoverable if the previous main residence is sold within three years.


The client is concerned there might be a delay it selling the old main residence immediately, so is exploring options of renting it out whilst they wait. However, it is not clear from the legislation or manuals what impact, if any, this has on the SDLT surcharge recoverability. Does the proeprty becoming a rental property taint its previous status of main residence?


My instinct is it does not, but knowing tax policy is generally unfavourable for those that let residential properties, I do not want to assume. If anyone else has encountered this scenerio, I would be grateful for some thoughts. Also, I appreciate this is as much a question for the lawyers, but naturally the client has directed this tax question to us first.

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By Justin Bryant
01st Feb 2021 13:26

Your instinct is right and there is no such tainting.

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