Since the 3% higher rate SDLT (Stamp Duty) surcharge was introduced on second homes there can be confusion as to whether this is payable when a couple decides to split.
When a married couple buy a second home or investment property, the additional 3% SDLT will be payable on that purchase. But what if they then decide to split up? It might make sense for one person to live in the original marital home and the other to live in the second home, or possibly sell it and put the money towards another property.
However, should a couple split within three years of such a purchase, HMRC may allow the additional SDLT to be reclaimed, and each purchase retrospectively to be regarded as if it had been made by each of the two parties in their individual capacity. In other words, neither party would be seen as owning two properties, even though both names might still appear on the title deeds of the marital home at the Land Registry, although this should of course be removed.
HMRC goes further, and defines a split not only as a divorce, but even if you are separated “in circumstances in which the separation is likely to be permanent”.
The extra £8,100 on a £270,000 purchase could come in very handy in a separation situation, but as this is a specialist field we’d nevertheless suggest that you should take expert advice before making any decisions. We’d be happy to point you in the right direction.