As far as I'm aware, if we have a BTL property and purchase another property as our main residence we can only treat it as the replacement of a main residence and avoid the higher rate of SDLT if the main residence it is replacing was sold less than 3 years prior to the purchase. Yet if I look at the gov.uk SDLT sections and use the gov.uk SDLT calculator it calculates that the lower rate is due, doesn't ask how long ago the main residence was sold and the SDLT sections do not seem to refer to the 3 year time limit. So is my understanding incorrect?
If I am correct, can we give an interest in the BTL property to our kids so that our remaining interest has a market value of less than £40000 each for my wife and I and then pay only the standard rate of SDLT on our new main residence?
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If I am correct, can we give an interest in the BTL property to our kids so that our remaining interest has a market value of less than £40000 each for my wife and I and then pay only the standard rate of SDLT on our new main residence?
Do you like paying CGT?
Seek professional advice.
You are right, to be able to use the sale of the previous main residence so as to come within "the replacement exception" you must have sold it within the previous three years. The calculator asks "Is the property being purchased replacing your main residence?" without giving an explanation of the three year tests that apply.
You do not say how old your kids are. If under 18 then their interests are treated as your interests for the purposes of the 3% surcharge. But you would succeed in forever robbing them of the status of first time buyers for the purposes of SDLT first time buyers' relief!
Such an argument is at best disingenuous and at worst dangerous (I doubt it would avoid a penalty or possibly worse if HMRC were to enquire into your SDLT1 - which HMRC commonly do re the (absence of the) 3% SDLT surcharge).
As an argument - yes, it's useless.
As a comment on the guidance - it has validity. You should be able to tell from what you are looking at that it's (excessively?) simplified. As it is, it relies on the reader asking "what does 'replaced' mean?" and then looking for (and finding) the answer.