News: The Recent Stamp Duty Increases May Affect Divorce Settlements
Published on 22 July, 2016 | Sam Hall
Following George Osborne’s decision for the Government to increase Stamp Duty from April of this year, this new surcharge is set to directly affect divorce settlements for separating couples.
Couples who own buy-to-let properties or second homes are likely to be liable for thousands of pounds’ worth of extra tax if they are granted an interest in a property during the divorce settlements.
If a husband or wife chooses to buy their own home, they will be required to pay an extra 3% of stamp duty on top of the existing tax liability of the property’s value. For example, if a property is worth £300,000, the owner would be liable to an extra £9,000 in tax.
Who is affected?
It is incredibly common for settlements to result in one partner receiving a buy-to-let property and the other receiving the family home. Therefore, couples should be aware of these changes before entering into a divorce settlement and seek professional advice on the matter.
The tax increase is most likely to affect women who did not have a stake in the marital home they lived in with their husband, but who are granted another property in separation (whether a buy-to-let property or second home). These changes will also affect less wealthy couples, where one partner leaves the marital home but still retains a stake in the property, to prevent it being sold, especially if the couple has children.
Are there exemptions?
Individuals may be able to claim a refund if their situation complies with certain rules: the separation needs to be likely to be permanent and the first home must be sold within three years.
Also, couples still in the process of finalising their divorce settlements may be able to appeal, but only if property settlements were agreed before November 2015 when the legislation was first suggested.
Professional and Personal Support During Your Divorce Settlements
At Hall Brown, we can help your divorce settlement process run as smoothly as possible. Our team has expertise in resolving the complications that can arise when finalising the financial aspects of a divorce. From settling the matters of family businesses to shared assets, we can offer support and guide you through your individual circumstances.
Find out more about our services by contacting a member of the team at our Manchester offices on 0161 804 7000, or email us directly at firstname.lastname@example.org.