Q My partner and I are not married. He has owned one property for five years. I am neither the legal nor the beneficial owner of that property, although in reality we treat it as belonging to both of us.
I have just bought a buy-to-let property in my own name. We did this using a “joint borrower single proprietor mortgage”. This was both because I would not have met the affordability requirements on my own and because if my partner was also on the deeds we would have had to pay the extra 3% second home rate of stamp duty. (The first-time buyer discount is not relevant because the price was more than £500,000 and it was a buy-to-let property anyway.)
Again, the understanding between us is that this property belongs to both of us. We know that there are significant risks in structuring things this way, as the legal situation does not reflect how we treat the two properties, and there would be big implications if one of us were to die.
Our plan now is to get married, to reduce some of those risks (we wouldn’t worry about adding each other to the deeds, though). If we do, is there a risk that the extra 3% stamp duty can be clawed back by HM Revenue and Customs (HRMC)? I have done a bit of research but I can’t seem to find an answer anywhere.
A My understanding is that when you are buying a home in England and Northern Ireland stamp duty is charged according to the situation that exists at the time of the transaction. So I don’t think that there is a risk that the extra 3% would be clawed back by HMRC if you got married.
If you had been married when you bought your buy-to-let property then you would have had to pay the extra 3% but you weren’t. Tax that should have been paid but wasn’t can be demanded retrospectively but not tax paid in full in accordance with the rules at the time.
Being married does have possible advantages in the future, though. Assuming that you both live in your partner’s property as your main residence, being married would mean that if you were to sell up and buy a new main residence, there wouldn’t be an extra 3% on the SDLT despite the fact that you have your buy to let. The same is not the case for unmarried couples.
Unless you want to, you don’t need to get married to deal with the implications if one of you died. You just need each of you to get a very clear will drawn up, which is the sensible thing to do married or not.