Some divorcing couples are being hit by extra stamp duty when they buy a new home.
There has been some confusion over when the second home surcharge applies.
In April 2016 the Government introduced an extra 3% stamp duty levy on a house purchase by anyone who is already owns a home, or jointly owns a home. The levy was criticised because divorced couples were falling foul of the rule.
In November 2017 the rules were changed by the Government so that divorced couples who obtain a Court Order can escape the additional rate. Unfortunately quite a lot of people do not know about this.
The problem is that the guidance on the website issued by HMRC is out of date. It was last updated in 2016 but as the new rules came out in 2017 couples, Estate Agents and indeed some divorce lawyers are missing this.
While the divorce has to be under a Court Order to escape the charge a lot of couples will not go through that process. If a couple simply just decides to separate then the exemption will not be available.
Sometimes parties in a divorce may accept the settlement to compensate for the loss of stake in the marital home but are not removed from the title deeds of the property. The effect of this will be that when they come to buy a new home they will be liable for the extra stamp duty.