UK stamp duty when you have a second home in France

I’m not sure whether this is the right category to ask this question but here goes…
We have a second home in France, but our main residence is in the U.K. and we pay tax in the U.K. We are currently selling our UK home in order to purchase a smaller one, although it looks like there will be a gap of around a month between selling and buying. We’ve heard from a friend that this situation will lead to us paying stamp duty at a higher rate as it will be judged that the UK house will then be our second home. Anyone know whether this is correct? Thanks

shhhhh, don’t tell anyone (official).

Gaynor… you’ve got me bewildered… you are UK Resident, selling your home in UK… so why on earth would it be classed as anything but your home…?

Have you spent too long outside UK and risk having your UK residency being questioned… ??? or what… very, very odd…

Hi Stella,
As I understand it if we were to sell and buy our UK house on the same day the loading on the stamp duty wouldn’t apply. It is the gap between selling and buying which causes the problem and falls foul of the new taxation loading in the UK on second homes and buy to let homes. Our French place is used for holiday purposes, albeit now that we are retired the holidays are longer. Before I raise this with our solicitor I thought I’d take advice here first.

Makes no sense to me.
When you say ‘a gap’ do you mean you will sell one before you buy the other, or buy the other before you sell the one - ie will you own 2 houses for a month, or 0 houses for a month?
Either way I don’t seriously think a month betwixt and between is going to cause any problem.

Good gracious… this does seem odd to me…

"If you buy a new main residence but there’s a delay in selling your previous main residence, you’ll have to pay the higher Stamp Duty rates as you’ll now own two properties.

You can request a refund for the amount above the normal Stamp Duty rates if:

You sell your previous main residence within three years, and
You claim the refund within three months of the sale of your previous main residence, or within 12 months of the filing date of your self-assessment tax return, whichever comes later."

Stella’s post seems straightforward. Yes, in theory you will pay the increased rate but then have three years to sell your property and reclaim the overpayment. In reality, is anyone in the UK tax system aware that you have a second home in France? Will the potential problem ever show up?

Hi David… if the OP is serious about buying and selling a main residence… then I cannot see that holiday home in France comes into the equation anyway… but, it’s been a long day (already) and my eyes are growing dim…:wink:

Thanks. Our situation will be not owning a UK house for a month. I wonder whether HMRC will then assume our French house to be our primary residence and consequently the UK home we buy to be a second home.

Thanks. Yes HMRC do know. We had a previous second home in the Haute Savoie. I believe they are informed by the notaire.

Ah, so you’re selling before buying… if you spend more time abroad than in UK… perhaps you will have the problem…:confused:

sorry, cannot help further… best of luck

I think you have a ‘grace’ period of 18 months between selling and buying a main residence.

The moneyadvice link points out that you have three years. The only downside is that you will have to pay the stamp duty then reclaim it.
Your principle residence is not necessarially your only house, it’s where the centre of your life is. For years I owned a house in France but my main residence was considered to be rented accommodation in another country. My residence didn’t switch back to France on the occasions when I was homeless for a few days when moving between locations.

See last paragraph that refers to selling a main residence before purchasing another.

Thanks everyone. Really appreciate your help and advice. I searched but hadn’t come across the information above

No I don’t think they’ll assume that! Getting HMRC to recognise you as a “leaver” for tax purposes is actually quite difficult, they don’t let go easily…

Will you be in contract to purchase your new primary residence at the time of the sale of the current home?