Stamp Duty: the hidden issues

first_imgHome » News » Stamp Duty: the hidden issues previous nextRegulation & LawStamp Duty: the hidden issuesIt’s not just about the hike, the Chancellor has some extra tax grabs.The Negotiator20th January 20160590 Views The new surcharge on properties purchased as second homes or as a buy-to-let has caused disbelief and fury – but there is more to it than meets the eye.David Gibbs (left), Taxation Partner at London based Alliotts accountants has the informed view, “The consultation paper makes clear that the proposed Stamp Duty charge is an additional three per cent on the whole of the purchase price. For example under the current rules, Stamp Duty on a second property costing £200,000 is £1,500. From 1st April 2016 this will rise to £7,500 – a 500 per cent hike.The draft rules are very tightly drawn so that the additional rate applies if ‘at the end of the day of the transaction’ an individual owns more than one property.“There are exceptions. If you are replacing your main home you are exempt from the charge. So if for example, you own a second property and purchase a new ‘main home’ then the additional charge won’t apply.  Buyer beware – the old home must have been sold by the end of the same day that the new home is purchased. The additional rate will apply if it is. There is a proposal to allow a refund if the old home is sold within 18 months but this still leaves a heavy negative cash flow for the owner.“Overseas buyers do not escape – the new rate applies on the purchase of a UK property if other properties are owned overseas. So most overseas investors will get caught unless they are moving home to the UK.“The Government has added a final twist. Unlike capital gains tax, there will be no opportunity to elect which property is the main home, but HMRC will determine that ‘based on the facts’.”Alliotts accountants buy-to-let second homes stamp duty surcharge on properties January 20, 2016The NegotiatorWhat’s your opinion? Cancel replyYou must be logged in to post a comment.Please note: This is a site for professional discussion. Comments will carry your full name and company.This site uses Akismet to reduce spam. Learn how your comment data is processed.Related articles 40% of tenants planning a move now that Covid has eased says Nationwide3rd May 2021 Letting agent fined £11,500 over unlicenced rent-to-rent HMO3rd May 2021 BREAKING: Evictions paperwork must now include ‘breathing space’ scheme details30th April 2021last_img

first_imgHome » News » Stamp Duty: the hidden issues previous nextRegulation & LawStamp Duty: the hidden issuesIt’s not just about the hike, the Chancellor has some extra tax grabs.The Negotiator20th January 20160590 Views The new surcharge on properties purchased as second homes or as a buy-to-let has caused disbelief and fury – but there is more to it than meets the eye.David Gibbs (left), Taxation Partner at London based Alliotts accountants has the informed view, “The consultation paper makes clear that the proposed Stamp Duty charge is an additional three per cent on the whole of the purchase price. For example under the current rules, Stamp Duty on a second property costing £200,000 is £1,500. From 1st April 2016 this will rise to £7,500 – a 500 per cent hike.The draft rules are very tightly drawn so that the additional rate applies if ‘at the end of the day of the transaction’ an individual owns more than one property.“There are exceptions. If you are replacing your main home you are exempt from the charge. So if for example, you own a second property and purchase a new ‘main home’ then the additional charge won’t apply.  Buyer beware – the old home must have been sold by the end of the same day that the new home is purchased. The additional rate will apply if it is. There is a proposal to allow a refund if the old home is sold within 18 months but this still leaves a heavy negative cash flow for the owner.“Overseas buyers do not escape – the new rate applies on the purchase of a UK property if other properties are owned overseas. So most overseas investors will get caught unless they are moving home to the UK.“The Government has added a final twist. Unlike capital gains tax, there will be no opportunity to elect which property is the main home, but HMRC will determine that ‘based on the facts’.”Alliotts accountants buy-to-let second homes stamp duty surcharge on properties January 20, 2016The NegotiatorWhat’s your opinion? Cancel replyYou must be logged in to post a comment.Please note: This is a site for professional discussion. Comments will carry your full name and company.This site uses Akismet to reduce spam. Learn how your comment data is processed.Related articles 40% of tenants planning a move now that Covid has eased says Nationwide3rd May 2021 Letting agent fined £11,500 over unlicenced rent-to-rent HMO3rd May 2021 BREAKING: Evictions paperwork must now include ‘breathing space’ scheme details30th April 2021last_img

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