Wedding planning is a nightmare but did you know if could cost you Stamp Duty?
I was asked about a married couple that are buying a property and whether the additional rate of 5% would be applied to the purchase.
The facts are that the man bought a house before they were even a couple. They became a couple. They got married. They started to rent out the man’s old house. They are buying a home. This is a fairly typical scenario.
The SDLT rules say (to paraphrase) that if when you buy a property you end up owning more than you did at the start of the day you will have to pay the additional rate of SDLT. The rules also state:
“Where an individual with a spouse or civil partner purchases an interest in a dwelling and their spouse or civil partner is not a joint purchaser, the test of whether the transaction is a higher rates transaction must be applied not only to the purchaser but to any civil partner or spouse of the purchaser as if they were the purchaser themselves.”
This means that no matter whether the property is bought by the man, the woman or in joint names they as a couple will be deemed to own more property than they did before the purchase was completed and the additional rate applies. How did the marriage cost them money? Well if we change the order of events a little the additional rate would not have been due. If they had bought the home in the name of the woman and then taken their vows the SDLT would have only been at normal rates.
Strange but true. It does not help this couple as they are already married but highlights a part of wedding planning that most would never have considered.
Note all entires concerning SDLT on this blog relate to England and Wales – Scotland has it’s own system – the Land and Buildings Transaction Tax