Stamp duty question

[Cheeseismymiddlename]

We have inherited a house. Probate granted so we can sell when we are ready . Likely we will miss the stamp duty deadline when buying another property. Hey ho.
We want to keep our current home and rent it as I have no decent pension. We want to move into the newly purchased home , it will be our main residence.
Stamp duty is significantly higher on “additional” properties / holiday homes than on main residence homes . The new house will be our main residence. I cannot work out if this means we will pay the “normal” level of stamp duty or the second home owner rate. The wording on line isn’t clear.
The difference is staggering , ie 5000 pounds or 14,000 pounds.
Any one know the answer for sure? Obviously I can ask a solicitor when the time comes but just wondering if anyone knows the short answer.
Thank you .

I am England and also going through something similar. My understanding is the same as wintertime6

@Brakebackcyclebot unless your situation is more complex than you've described, please make sure that you definitely have to pay the higher rate of stamp duty before you pay out all that money! I can't see anything to say that the rules are different in England, and as I said earlier, we spent a lot of time making sure we understood the exemptions for purchases of second homes and replacing main residences.

@Brakebackcyclebot you are not liable for the higher duty IF you are replacing your main residence.

If a solicitor has advised you this then they have given you bad advice. It clearly states on the gov website that it does not apply if you are replacing a main residence.

When we bought our new home last year we were specifically asked if we were replacing a main residence by our solicitor because this is the key. We did not have to pay stamp duty, and I even confirmed it with HMRC just to be sure.

Basically to not pay the additional stamp duty you have to sell another residence or it be your first residence.

Been in this position myself. The inherited property is irrelevant. You haven't sold your previous main residence therefore you will pay the. Additional stamp duty

Sorry. Just re read. Since you're not replacing your main residence it looks like you're going to get screwed for this extra tax. (Because inheritance tax is not enough apparently...)

Sorry to have complicated the question!

I am going to call HMRC and ask!

It’s not straight forward at all. Thank you for all replies.
Things I keep thinking about.
Yes, I will be selling a property to buy a property.
Yes, we are replacing our main home. So these qualify for the lower rate of stamp duty.
But we are keeping our current main property , therefore buying a second home and therefore will pay the higher Stamp duty tax.
I did wonder if the “test” might be so long as you move into the new property full time then it qualifies for the lesser rate, however, posters further up the thread have clearly stated this was not the case for them .

I've looked into this recently, as we'll buy our new house before selling our current home. It should mean we only own 2 houses for a matter of months, but this makes it quite clear. Basically if you own 2 main residences at the end of the day, you have to pay

@Cocoaone yes you'll pay the higher rate in that case but you just claim it back when you sell your own house, as long as you sell it within 3 years. It's a pain because you have to pay the money up front, but you do get it back again.

@Cheeseismymiddlename I guess there's no way you can just rent out the inherited house, and then sell you own house to buy a new one for you to live in? That's the only way I can think of to avoid the higher charge, but of course it may not have much rental potential and you might not want to have to deal with a rental property so far away.

@wintertime6 - yes that's my understanding. I'm just hoping our sale goes through before end of June as the jump is quite high otherwise - £15k before end of June, £27k after
I'm not sure how long it takes for them to give them money back. 6 months plus, knowing HMRC....

@Cocoaone I know, it's a lot of money 😤. Apparently it's a quick process to get the refund 🤞

Hi winter time . Our current home is too small for our needs. If we sell it and keep the inherited house we will only be able to afford another smaller home. The inherited house could be rented out either long term or as a holiday let ( but holiday letting doesn’t sit all that well with me ). It’s in an area where the housing market is crazy and local stock of homes does not meet the needs of the community. Again, it’s a bit on the small side for our needs, however, it’s value would buy us the right sized house in the area we live.
Hanging on to the inherited house and retiring into it an option but my children are still teens and won’t take kindly to such a drastic change of scenery and life style.

From the .Gov.Uk link applied to England and NI :

“When the higher rates do not apply
The higher rates do not apply to certain people, property and transactions.

People
Do not include anyone who will both:

use your new property as their main home
have sold or given away the last main home they owned before you buy your new home (or on the same day)”

Hi OP, and everyone else!

I did quite a bit of research last night - the answers to the higher rate SDLT questions are not simple! HMRC have published a really detailed guide, which contains A LOT of case studies, one of which reflects my situation exactly (and turns out we aren't liable even though DH owns a rental property, because we are selling my house, which we live in, therefore replacing our main residence, and we are married - if we weren't married, the answer would be different).

OP I hope your scenario is covered!

www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual

The higher rate stuff starts here:

www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm09800

Can anyone advise in our situation, I think we are unlucky and will be stung by the second property stamp duty:

DH owns half a house which he doesn’t live in and doesn’t rent out. The other owner lives there and pays the mortgage.

We are renting. We are buying a house together.

Do we have to pay the higher amount of stamp duty?

Looking forward to re reading this again tonight and following the links. Thanks very much for the input.

@Brakebackcyclebot glad you got sorted! Shocking advice from your solicitor though, that information is available for anyone to read on the HMRC website as you are obviously aware!

@OrangeSparkle yeah I'm pretty sure you'll have to pay the higher rate unfortunately if your DH wants to keep his investment in the other house, but obviously check that out for yourself in case you might qualify for any exemptions.

@orangesparkle - I suspect the HMRC document I attached earlier will have a section that answers your question. The issue may well be that as you're renting, you don't qualify as replacing your main residence.