Many Divorce Settlements Could be Left Open to Appeal
Many Divorce Settlements Could be Left Open to Appeal
Thousands of divorce settlements could be left open to challenge because the recently introduced stamp duty surcharge means some estranged partners are unable to purchase their own home following separation. A quirk in the new law means that the tax is not being factored into settlements and a spouse can argue that they have been unfairly disadvantaged by the surcharge, which can add thousands of pounds to the cost of buying a new home.
The new surcharge ensures that anyone who buys an additional property has to pay additional stamp duty of 3 percentage points on top of the existing tax liability for their property’s value.
The new rules, which came into force in April, mean that a husband or wife who is granted an interest in a property, such as a buy-to-let residence or second home, after a divorce will be liable for thousands of pounds in extra tax when they buy their own home. It’s a tax that is particularly likely to affect women who didn’t have a stake in the marital home, and who are granted other property in a separation.
The law allows anyone who sold their main home within the past three years – or, currently, before November 2015 – to buy a new one without paying the extra tax.
However, a quirk means that if one of the estranged partners does not have a previous main home to sell, he or she is liable for the extra tax.
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