Non married couple, flip across the road, SDLT and CGT

[jonathanrook_gmail_com]

Hi Hubbers,

Apologies if this has been asked and answered before (I could find anything in the search option).

A potential flip has just come on the market directly opposite my main residence that I own jointly with my partner (we aren't married).

>>I'm thinking I could move in across the street whilst the refurb is being undertaken, and make this my primary residence (with my partner continuing to live in our existing house)

I'm guessing this would mean that I would:

1.  Get CGT relief as the flip is my main residence.
2. Avoid the 3% surcharge on purchase of the property as this is replacing my primary residence.

However how would the tax man view the stamp duty we previously paid on our primary residence (i.e. the house me and my partner live in currently)? Would they expect some clawback?

Anyone have any other potential pitfalls to what I've described?

Thanks hubbers!

Jono

 

[Debbie Franklin]

To avoid the 3% SDLT you need to be replacing your main residence so you would need to sell the current main residence.

Living in the property would not automatically make the gain subject to CGT and thus PPR. It is based around quality of occupation and intention. If HMRC contend your intention was to flip it whether you live in it for a short period would be irrelevant.

[hennnerz_gmail_com]

As you are not married and not in a civil partnership if you gifted your share of the home to your partner, then moved into the property across the road I think this would be OK in terms of avoiding the 3% stamp duty on a 2nd home.

However, you might then hit issues with your mortgages and as Debbie says above your intention could open you up to Capital Gains Tax.

[jonathanrook_gmail_com]

Thanks guys, definitely food for thought. I think I'm going to take some advice on this and keep progressing the purchase but with this tax angle being the "cherry on top" rather than driving the deal or making the deal stack up.

 

Thanks again for taking the time to read and reply!