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Stamp Duty Land Tax on Main Residence

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A client has owned 50% of his main residence with his girlfriend for a number of years.  About 4 years ago his Father died and his house was left equally to my client and his brother and this house has been empty since my client's Father died.  Recently my client and his girlfriend have decided to part and he is in the process of buying her out.  The total amount he will pay her is £158,000 which is made up of her share of the mortgage and her share of the equity in the property. Will this transaction incur the additional 3% stamp duty?

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By Justin Bryant
30th Apr 2020 12:45

Yes, if this is beyond the 3 year time limit* (assuming the inherited share is worth >£40k). See: https://www.blakemorgan.co.uk/sdlt-3-surcharge-on-inherited-properties/ https://www.theguardian.com/money/2017/jun/08/higher-stamp-duty-inherite... https://www.zoopla.co.uk/discover/buying/q-a-new-3-stamp-duty-surcharges/

However, there are simple ways around this potentially.

* NB this starts from when the property was transferred to him by the executors, not the death date, so if he gets his skates on he may be OK.

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By JohnShallcross
03rd May 2020 08:07

There is a special SDLT rule about the 3% extra SDLT not applying where someone is enlarging their interest when they had at least a 25% share already and have lived in the property throughout the previous three years as their only or main residence.

This rule came in from 22 November 2017 and is explained in section 3 of the paper here: http://2kxoi048lz5d327itw3e7f8c-wpengine.netdna-ssl.com/wp-content/uploa...

It looks as if this exception from the surcharge might apply here.

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