Final hour Stamp Duty payment

[TAP100]

Please could someone advise me. I’m hoping to complete on the purchase of a property within the next week. I sold my own property in May this year and have been in rented accommodation with my boys for the last two and a half months. My husband and I are separated and he owns his own home ( I’ve never lived there). I purchased my previous property in October 2014 . After having my offer accepted on a property my solicitor informed me I’d have to pay £1,940 in stamp duty, but today on realising I am still married informs me that my home will be considered a second home because I’m not legally separated, and I will now have to pay £8,600 in stamp duty.
My husband and I have lived independently since March 2016, paying utilities, council tax etc for our respective homes. Had I know this when I first put in the offer and instructed her I could have made different financial decisions. Do I have any recourse and is she correct? Thanks in advance.

If you are named on the deeds of the property your husband lives in, she is correct

Just because you're still married doesn't mean it's your home?!
It depends whether you are named as an owner.

I’m not named and I never have been , equally he wasn’t on the previous property I sold. The solicitor seems to thingstne HMRC rules changed in 2016. I’ve looked at the examples on the government wesite but non are similar to mine. I’m not certain now if I can afford to proceed which is an impossible situation especially now we have given notice on the rental property.

I recently rang HMRC with almost exactly this query, and was told that as the new house would be a replacement for previous house I owned, and I had never been on STBexDH's house deeds, no, I wouldn't have to pay the higher rate.
Didn't get this in writing, which I would have preferred.

Try ringing them yourself, and if answer is a good one, maybe try to get it confirmed in an email?

www.gov.uk/government/organisations/hm-revenue-customs/contact/stamp-duty-land-tax

I'd be grateful if you could report back.

Thank you so much for those of you taking the time to advise me. I’ll call HMRC myself. My solicitor could be wrong- here’s hoping.

As soon as I have a definitive answer I’ll report. I just took what she told me today as gospel, I’m desperately worried obviously.

Try not to worry. I don't know the law but I do know that after two years living apart you can file for divorce so the fact that you can prove you have not lived together for over two years tells me that this can be easily sorted through showing a few documents

Unfortunately if you are married I believe you are viewed as owning for stamp duty purposes even if it's in his sole name. I have been in a similar situation after helping my dad when my parents divorced. I went on his mortgage as after being made redundant and taking a lower paying job he didn't meet affordability checks in his sole name. We're now remortgaging to remove my name as I'm in SE and prices are so crippling anyway there is no way we could afford the extra 3%. I get the logic behind it but I don't think it is well thought out in some cases like these.

This link may help - https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm09820

It is relevant that you're married BUT the exceptions are:

• if you're legally separated; or
• they are, in fact, separated in circumstances in which the separation is likely to be permanent [Para 9(3) and section 1011 Income Tax Act 2007].

It's this last bit that I think can get you out of paying the additional rate.

If your separation is permanent then as long as you're named on only one property at the end of the day of purchase then you won't have to pay the additional rate.

That's the most definitive thing I've seen in writing, Crazy, many thanks for that.

Its an HMRC manual as used by Inspectors so doesn't get more official really!

I just hope the solicitors haven't gotten it wrong for other people beforehand...!

Is she even a real solicitor? Most conveyencers aren't. You can either tell her she is wrong and tell her to do it as a first home at the risk of having to pay extra stamp duty later or you can call the HMRC yourself to find out (but a lot of the reps are pretty hopeless too so you may not get the right answer).

I think CrazyDaisy2018 is correct. Provided that you are separated and aren't on the Title Deeds for another property you shouldn't have to pay the higher rate Stamp Duty. I did look at the regulations in detail but it was when the changes first took place so I can't quote chapter and verse.

@TAP100 just hoping you've seen CrazyDaisy2018's input above : given the source, this is the definitive info.

Thank you Crazy Daisy, I’ll go on to the links and read around it. These things require the attention that during the school break I haven’t got the time to give them.
Added issue is that I don’t necessarily need or want a divorce I’ve been happy as has my husband with the status quo therefore we haven’t changed many of our documents.

I would hope that in the (highly unlikely) event of an HMRC enquiry the burden would be on them to prove that your separation is not permanent rather than you proving it is.

Just to get your ducks in a row, once you've got your new house I'd make sure that all your correspondence is changed to the new address so HMRC can see you're living entirely separate lives.

Hopefully your solicitor doesn't give you any grief.

My understanding is that you will need some legal document to prove you are separating. A deed of separation is a quick and cheap way to accomplish this without needing to go through a full divorce. Otherwise, you will almost certainly be liable for the 3% stamp duty penalty.

The exemption to be used is " separated in circumstances which are likely to be permanent".

The issue is, how this can be demonstrated in a way acceptable to HMRC.
They will want to see that you were a married couple, have split up, and intend and are likely to remain split up. Rather than a comparatively wealthy couple who own two houses between them, and claim to live in one each, because it makes their tax situation better.

There is judicial separation, a legal process akin to divorce: not doable in the time?

There is a deed of separation here
But also read www.mumsnet.com/Talk/legal_matters/969418-Separation-Agreements-can-you-do-it-yourselfthis. There are pitfalls in rushing a legal agreement.

Alternatively, things I have used to demonstrate that 'ex'DH and I have split up, although still legally married, are copy of letter from CMS about child maintenance,
and also a Statutory Declaration. The SD was the only thing acceptable to Student Finance.
I drew it up myself, with the help of the internet, and had to 'swear' it in front of a suitable lawyer ( official £5 fee)

One of these, plus evidence of having lived apart, might do it.
Again, I'd ring HMRC and ask.

You’re absolutely right Nicolette, it appears an I’ll thought out law.

Crazy Daisy thank you for your advice. My husband and I haven’t made moves to divorce as the separation was so protracted were both done with the drama, therefore I hadn’t considered having to change anything really as we were living independently. I fully intended to contact HMRC to pose the question but I’m now concerned that I may unearth all manner of issues because we are in this situation.
My solicitor has given me an 11 question SDLT enquiry form that my husband has to fill in that asks his address, and things such as “do you intend the property you’re purchasing to be your main residence?”
When I questioned her again and said “ he’s not purchasing the property, this form is madness” ! she told me he was to write NO.
When I first instructed her after selling my home and moving into rented accommodation she sent me out a disbursement of fees which showed my stamp duty was going to be £1,940, that was sent out to me on 18th May. She only realised I was married during the course of a conversation late July, about 10 days later she sent me out the new figure of £8,600. In the intervening weeks I arranged to mortgage to fit my finances etc etc. I’m wondering now if I have any recourse because surely she should have informed me in the beginning (asked questions that are vital and have implications on my ability to afford the property). Or can I tell her I’m only going to pay the lower rate and see if the HMRC then object?

I would call HMRC and ask them to confirm your understanding of the manual (and give them the reference number of it so you know they're looking at the same thing). Get a name or reference number for the call if you can.

When you explain your situation tell them that at the moment your lives are still slightly intertwined but although you don't have a legal separation, it is permanent and that you will divorce eventually. You have no plans on ever living together. The new house will be yours. His house is his.

Hopefully they'll confirm what their manual states.

If they do, instruct your solicitor in writing of the advice you've been given and the reasons why the higher rate doesn't apply.

They shouldn't be able to force you to pay the higher amount. If they did I'd be writing to HMRC personally after the event to obtain a refund for their mistake.

Crazy Daisy thank you again. The advice is incredibly helpful. I’ll get on to it on a Monday as I’m away tomorrow. I’ll update as soon as I have an answer.

You're welcome. Drop me a pm if you need any help with HMRC and I can contact them as we have some direct agent lines at work. X