Stamp duty on 2nd homes

The rate of stamp duty on "second-homes" is set to increase. Will this affect home owners who buy a new property before selling their existing home?

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I was wondering that
I doubt that they have firmed up the rule yet, but it would be nice to know that they consider it a problem worthy of a solution.
And there's also the problem of the separating couple where the partner moving out wants to buy a new property but is still shown as the owner of the old one (something that the mortgage companies are loath to allow to change as they like the security of still having both parties liable if there's a default)
a right can of worms this proposal is (especially as it can be got around by putting each property into a different Ltd company)
tim
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On 26/11/2015 22:16, tim..... wrote:

I'm surprised Ltd Companies aren't used more often as a shell for a BTL. More paperwork yes. But also an option to use capital allowances by drip feeding the sale of shares.
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On Fri, 27 Nov 2015 01:25:58 +0000, Fredxxx put finger to keyboard and typed:

Mainly because it's harder, and usually more expensive, to get a mortgage for a ltd company. Even as a preferential creditor with a secured loan, a mortgage company is still at greater risk should a company become insolvent than it is with a loan to an individual. So the costs of a commercial mortgage reflect that, as does the minimum LTV ratio.
That's not to say it's impossible, by any means, and a company can be an attractive vehicle for a professional multi-property landlord. But the costs tend not to work out favourably for the typical non-professional BTL landlord who has one or two properties that he lets in addition to a regular job (or a pension) as his primary source of income.
It is, of course, plausible that the new stamp duty rules may offset that and make company ownership more cost-effective for more landlords. We'll have to wait and see.
Mark
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Mark Goodge wrote:

Did you (Fredxxx) mean the capital gains tax "annual exempt amount" (?11,100 this year) rather than "capital allowances" (which AFAIK are still not available for residential lettings)?

Not to mention finding buyers willing to buy shares giving only a minority interest in a company.

It'd be pretty dim if the additional charge were not applied to companies one way or another given the existing provisions which deny the benefit of the exclusions from the 15% higher rate SDLT charge if residential property in trust or owned by a company is occupied by settlors, people who control the company, their spouses, etc etc.
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Robin
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On 27/11/2015 09:38, Robin wrote:

Yes, I did.
It will be interesting to see what happens to the rules regarding residency and if there is any more house "flipping".

The loan could still be personal, and still with a charge on the property. The Ltd company is merely the middle man, where the individual loans to the company. Directors' loans are quite common in Ltd companies

Or even share options to be paid at an agreed rate in the coming years?

You would think so, but given the Ltd is an identity in its own right, and that this entity never sells the asset I don't see how any rule of this nature can be applied in a simple manner.
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Fredxxx wrote:

Well off the cuff 2 options are:
a. bringing the properties within the 15% SDLT rate: could act as a deterrent but if not gives a nice front-loaded yield. ("It's win-win Chancellor because we can also hit them now or later with... b. a further extension of ATED to lower value properties (ie lower than the changes announced in the Autumn Statetment) - more yield the more properties are in corporate envelopes.
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On Thursday, November 26, 2015 at 10:45:07 AM UTC+1, Optimist wrote:

ffect home owners who buy a

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It seems that HMG did indeed think about this in advance and a refund of the "overpaid" tax will be obtainable if the "other" primary house is sold within 18 months of buying the second one.
Dunno whether there are any other conditions (such as it not being rented out in the gap)
tim
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Thanks!
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