It will also help in instances where a spouse or civil partner buys property from another spouse or civil partner, and where a deputy buys property for a child subject to the Court of Protection, and where a purchaser adds to their interest in their current main residence.

This will affect those paying the 3% higher rate SDLT for second home purchases.

The Treasury has also confirmed that the introduction will close down an avoidance route whereby SDLT could be avoided in certain instances, for example when someone who changes main residence retains an interest in their former main residence.

The higher rates of SDLT have applied since April 2016 to all those who purchase residential property when they already own at least one property, and are not replacing their main residence. The higher rates are 3% above the standard rates of SDLT.

Legislation in Finance Bill 2017-18 will introduce changes to Schedule 4ZA to FA 2003.

Amendments will:

• prevent abuse of relief for replacement of a purchaser’s only or main residence by requiring the purchaser to dispose of the whole of their former main residence and to do so to someone who is not their spouse;
• disapply HRAD where an individual buys a property from their spouse or civil partner;
• disregard certain interests retained by a former spouse or former civil partner upon dissolution of a marriage or partnership - it disregards an interest if it is held under certain ‘property adjustment orders’, for example in the case of a divorce; and
• make changes so that a property held by a child’s parents is disregarded when a property is purchased by a child’s trustee pursuant to power conferred on the trustee by a relevant court appointment, for example such an appointment made by the Court of Protection.

Stamp Duty Land Tax: higher rates - minor amendments

by Sara White