The 3% Stamp Duty Land Tax Surcharge

Have you been wondering about the 3% surcharge when it comes to Stamp Duty Land Tax? You wouldn’t be alone. It can be a tricky area to navigate at the best of times. Thankfully, our experts have been on hand to work up the nuts and bolts you need to know. Let’s take a look at what they have to say…

 
SDLT and the 3% surcharge – what you need to know

 

A 3% surcharge is added to the regular Stamp Duty Land Tax (SDLT) rates when a person acquires an additional residential property at a cost of £40,000 or more. That is, unless the purchaser is changing their main residence.

 

The acquisition will be regarded as being an additional residential property if you already own residential property anywhere else in the world and a former home is not being sold on the same day.

 

The rules also apply when purchasers acquire a property jointly should any of the purchasers be regarded as acquiring an additional property.

 

These rules can therefore easily catch people out. In particular, those who buy a new home to live in, but who do not sell their previous home on the same day.

 

Reclaiming the Surcharge: What You Need to Know

 

However, should this be the case it is possible to reclaim the 3% surcharge. The following criteria would apply:

  1. At the time of purchase, the new property is intended to be the purchaser’s main residence.

  2. In the three years following the purchase of the new property, the purchaser must dispose of their previous main residence.
  3. The previous residence must have been used as their main residence during the three year period preceding the date of the purchase of the new property.
  4. Immediately after the disposal of the old property, neither the purchaser nor the purchaser’s spouse or civil partner had a major interest in the old property.

When these conditions are met, the 3% surcharge can be reclaimed from HMRC once the previous home has been sold.

 

In short…

 

Stamp Duty Land Tax can be a complex area. As such, it is important to familiarise yourself with the latest rules and to seek help when you are unsure. At Lewis Brownlee, we would be pleased to provide further advice to anyone affected by this. With a team of expert tax advisers poised, we’ll have you on your SDLT way again in no time. So, please do get in touch – and together, let’s partner in your success!

 

 

 

As always, you can call us on 01243 782 423, or email us from our contact page to see how we can help!

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