Does SDLT surcharge transitional relief for replacement of residence apply?


“Client currently renting wants to buy the same property from his landlord for £350,000.  He has an interest in a property in Spain

The client says:

“Concerning my ‘properties’, from memory, on divorce we sold our principal and only UK residence in May 2011 and I’ve rented at 19 The Elms since then.  We purchased the property in Spain about 10+ years ago – so say 2006 and used it as a holiday apartment.  In the divorce it became 100% mine but I’ve yet to have the title deeds in Spain updated to reflect this. The property is hopefully worth at least EUR160k (so well over GBP40k).  I’ve rented it out for the past 18+ months

I own no other properties anywhere.”

I think he is liable for higher rate SDLT’.

Source: BLG Member


The replacement of an only or main residence exemption should, in principle, apply so that the 3% surcharge does not bite on acquisition of the client’s new home.  Under the transitional rules there is a replacement of a main residence if, at some time before the purchase, (which is completed on or before 26 November 2018) the client disposed of a major interest in another dwelling and that other dwelling was, at some time, the client’s only or main residence.

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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