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First Time Buyers’ Relief

Santa checking SDLT information
First-Time Buyers’ (‘FTB’) relief

After years of hard work and having accumulated many air miles, Santa has decided to pass the family business to his son and a number of highly regarded elves, and move to Northern Ireland to retire with Mrs Claus.

They have heard about the new First-Time Buyers’ (‘FTB’) relief announced in the latest budget and have queried whether, if Mrs Claus were to purchase the £300,000 property in her sole name, no SDLT would be payable.

There are a number of points to consider:

  • The property must be the first ever purchase and must be intended to be occupied as the purchaser’s only or main residence. Therefore buy-to-let properties will never qualify, even if it is a first purchase.
  • Properties anywhere in the world must be considered, not only properties in the UK. Therefore, if Mrs Claus owned a property in the North Pole, she would not be eligible for the relief, even if it is her first purchase in the UK.
  • The relief will not be available if the 3% surcharge applies. As spouses/civil partners are treated as effectively the same person for the purposes of the surcharge, if it applies for one spouse, it will equally apply to the other. In this case, Santa owns their home in the North Pole in his sole name. Accordingly, although Mrs Claus does not have an interest in that property, the 3% surcharge will apply unless Santa is disposing of the North Pole residence.
  • The couple are gifting their home to their son as part of their move, so this will be treated as a disposal of their main residence and therefore the 3% surcharge should not apply to the purchase of the NI residence.
  • As the draft legislation currently stands, there are no spousal aggregation rules for the purposes of FTB relief.

Accordingly, provided the NI property is purchased in Mrs Claus’ name only and Mr Claus does not acquire any beneficial ownership in the property, no SDLT will be payable.

This case study has been prepared on the basis of the draft legislation published which is subject to change until it receives Royal Assent.

If you have any queries around SDLT please do not hesitate to get in contact via our SDLT Advisory Service.

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