Since April 2016 you have to pay an additional 3% stamp duty on the purchase of a second or subsequent home. This 3% applies to the full value of the home and is not tiered like normal stamp duty.
Now, I am not an expert on stamp duty regulations and would not consider advising clients, however in the last month we have had two clients categorically informed that they will have to pay stamp duty as they sort out the finances of their divorce.
One client was purchasing his former marital home which he had moved out of into rented accommodation when they separated and the other client was re-mortgaging an invest property in his own name, to release cash for his wife to buy a new property.
The second client was told by their conveyancing solicitors that stamp duty was not only due, but due at the additional 3% rate. The total stamp duty bill for the two transactions came to a little over £30,000.
We queried this at Divorce Friend and send the clients an email to forward onto their solicitors. Subsequently both solicitors have retracted their original claim that stamp duty is payable and have agreed that no stamp duty is payable at all on either transaction. Zero. Nilch! Just one email saved over £30,000!
The government website states:
You don’t pay SDLT if you transfer an interest in land or property to your partner as part of an agreement or court order because you’re either:
- dissolving a civil partnership
This also applies if the partners either:
- annul their marriage
- legally separate
In these cases there’s no need to tell HMRC about the transfer, even if the value is more than the SDLT threshold.
So you do not need to have a court order, decree nisi, decree absolute or anything else as long as you are transferring a property as part of your divorce. Importantly you do not need to wait for the consent order. It can be by a verbal agreement between you.
We love saving clients money at Divorce Friend, which is why we set up fixed fee packages including access to legal advice and barristers. But I have to admit that we did not expect to save clients over £30,000 in our first month of trading. Smug grins all round.