Although, generally, property lawyers know about taxes associated with transfers and disposals (sales) of property, I have come across a couple of instances where they have not fully advised their clients.
When a property is owned by a couple (married or civil partnership), if they change the ownership from 50:50 to another ownership split, then a form (Form 17) must be submitted to HMRC within 60 days of the transfer. This must be sent with evidence of the new split (such as a Declaration of Trust) otherwise, for tax purposes, the split will remain at 50:50.
Sometimes it comes to light, when preparing a Tax Return, that Form 17 has been overlooked – resulting in more Income Tax being paid by the person transferring the ownership than was intended. The new ownership split would only then apply if a new Declaration of Trust was prepared and a copy submitted to HMRC with a Form 17.
Even though the additional 3% Stamp Duty Land Tax for buying a second home (for more than £40,000) has been law since April 2016, it still seems to cause confusion. If you are buying a second residential property – whether to live in it as your home or as a buy-to-let – you will have to pay the additional 3% SDLT surcharge. So, if you move into the new home and rent out your old residence, you will still have to pay the 3% SDLT.
It is possible to get the 3% back if you if you purchase a new home and sell your old home within 3 years – but you still have to pay the 3% SDLT surcharge in the first place.