LBTT revisited - "Tax doesn't need to be taxing" - yeah right!

I recall that this was the strap line to an advertising campaign by HMRC to try and persuade us that tax was straight forward, encourage everyone to complete their tax return and get it back to our friends at the revenue before deadline. It appears that those bods forgot all about this advertising campaign when they came up with the surcharge on second properties. What the revenue have created is a minefield for the unsuspecting purchaser who is now left with the possibility of paying an unwanted 3% surcharge just because their circumstances fall outwith the tight revenue stipulations. The dust has settled on the changes and this is what we are currently left with.

You have to pay the surcharge if you are:-

1. Adding a new Buy to Let (BTL) property to their existing portfolio.

2. Buying a first home which will be your main residence but already own an inherited property that is let out.

3. Buying a new main residence but the sale of their current property falls through.

4. Going through divorce proceedings after which time they won't own their marital home, but in the meantime wants to purchase their own property.

5. Buying their first home but due to affordability constraints is putting a parent on the mortgage who already owns a property.

6. Purchasing a new main residence in the UK, but already owns a holiday home abroad.

7. Purchasing a new main residence and turning their existing property into a BTL (Let to Buy).

You do not have to pay the surcharge if you are:-

1. Selling your main residence to purchase a new residence to purchase a new main residence but also owns several BTL properties.

2. Unmarried and currently lives in property their partner solely owns, but wants to purchase their own BTL property.

3. Living in rented accommodation, owns one BTL property and sells it to purchase another.

So there you have it - a snapshot of where we now sit with LBTT. Remember that you can claim back the surcharge if you sell your main residence within 36 months. How quickly the money hits your account after your sale is of course down to Revenue Scotland. Good luck with that!