Stamp Duty pitfalls when buying a property in the UK

Second property 3% supplement

You will usually have to pay an additional 3% SDLT if buying a residential property in the UK means that you will have more than one. The other property does not have to be in the UK, but can be anywhere in the world, and includes an interest in a residential property as a beneficiary of a trust. There are exemptions for additional homes costing less than £40,000 and additional property bought as part of a divorce or separation. Special rules apply to companies and trusts.

The supplement is not due if the property you are buying is replacing your main residence (and that is your only residential property) and that has already been sold. However, if you have not sold your former home on the day the purchase settles/completes, then the supplement is payable, but you can get a refund of the 3% supplement if you sell your main home within 36 months of the transaction date, which is normally the settlement/completion date.

Non-resident 2% supplement

You are not resident in the UK for SDLT purposes if you are not present in the UK for at least 183 days during the 12 months before your UK property purchase. For a joint purchase, all purchasers must meet this test, although for a married couple (that have not separated) it is sufficient for one of them to meet the test. Citizenship does not affect the application of this supplementary SDLT charge. The supplement applies even if the rate of SDLT is zero because the property is below the £250,000 SDLT limit, and special rules apply to trusts and companies.

It is possible to get a refund of the 2% non-resident SDLT if you are present in the UK for at least 183 days during any continuous365-day period in a 2-year period which starts one year before the purchase and ends one year after the purchase. Again, all purchasers must meet this test to the relief to apply, but with the same exception for married couples. You can apply for this this relief up to 2 years after the transaction date.