A new client who is a minister of religion (and therefore lives in job related accommodation) had a property which was designated with HMRC as the main residence which they then sold in June 2021 (no CGT due to main residence). The client is now purchasing a replacement main residence closer to where his daughter lives as he intends to retire in a few years time and the solicitor is informing the client that the surcharge is payable as their is no legislation that accounts for job related accommodation (he is a vicar). The case is further complicated by the fact he officially owns 25% of the house his mum lives in.
My initial thoughts when looking through the stamp duty legislation is that the 3% is payable as the previous property wasn't lived in and he partly owns another residential property.
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I think if he has an interest in another residential property, he’s liable.
Haven’t seen the guidance recently but suspect it’s that simple.
The June 2021 property sale looks a bit iffy re PPR if he did not, as a matter of fact, live there (albeit there was a main residence election on it).
The SDLT replacement of a main residence test is arguably more strict (or less generous) than re CGT and so 3% SDLT surcharge will be payable re his 25% interest in his mum's house - assuming it's worth >£40k.
Yes; good point re s222(8). A bit of a tax loophole that, as one could treat any BTL etc. as a PPR.
"The case is further complicated by the fact he officially owns 25% of the house his mum lives in".
No it's not further complicated - it wasn't at all complicated before you introduced that point (since the vicar presumably doesn't have any ownership of the job related accommodation).
But the 3% surcharge applies when purchasing any property when you already have ownership of part/all of another property (anywhere in the world)*
* = see https://www.gov.uk/guidance/stamp-duty-land-tax-buying-an-additional-res... for more details.
N.B: And don't forget the 3% is not 'merely' an increase in the %age applied to bands, it is a 'slab' charge applied to the whole transaction.
As far as SDLT is concerned, the job related accommodation is a complete red herring and only the property already owned can and probably does mean the 3% surcharge applies.
If there's enough of a disparity in values between the 25% share of his mum's house and the house he intends to buy, it might be worth considering selling that 25% share prior to the purchase, if that's an option.
I had guessed as much but thought they might perhaps buy your client out.
With an agreement, a sibling agreement that is, not a legal one and not written down anywhere or even hinted at anywhere, indeed you should burn my post after reading, that he buy it back from them a bit later on.