How do the rules for relief for the 3% SDLT surcharge on the replacement of an only or main residence work for married couples?

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“I am acting for a husband who lives apart from his wife. They are not estranged or separated and for the purposes of the SDLT calculation they are considered to be living together (for family reasons they currently live in separate parts of the country). He has one property he is currently selling (his main residence) and purchasing another (his replacement main residence). She already owns and lives in another property as her main residence.

In these circumstances I am satisfied he must pay the SDLT surcharge.

If he sold his main residence and went to live with her in her main residence within the three year time frame so they only owned one property between them, would he be entitled to a refund of the SDLT surcharge payable on the current purchase transaction?

If she sold her main residence and went to live with him as their main residence within that time frame would the same rules apply to enable him to recover the surcharge on his current purchase? I do not think so but I should be grateful for guidance.”

Source: BLG Member 


As the husband is purchasing the dwelling (property B) which will become his only or main residence (‘OMR’) in his sole name then, if the husband and wife are ‘living together’ at the date of completion of the purchase of property B (applying the test in section 1011 ITA 2007), that purchase will be subject to the 3% surcharge if it would have been had the wife been the purchaser. ‘Living together’ means neither formally separated nor in fact separated in circumstances that are likely to be permanent.

If the wife had been the purchaser one of the conditions for OMR relief would have been that, at the date of completion of the purchase of property B, the wife intended that property to be her OMR. If she did not, the surcharge will apply to that purchase and will not be recoverable whatever happens later.

At the time of publication this response was correct however as tax legislation and practice change from time-to-time you should take specific advice before taking any action.

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