Baggist

We are due to sell our overseas property where we have lived for 20 years sometime this summer and propose to return to the UK. We can time this return at our discretion.
I understand for tax reasons it's best to inform HMRC of our UK tax residency at the start of a new tax year which in our case would be April 2025 and time our return to the UK to coincide with this.
However if we were to purchase our main residence in the UK before that date would we be subjected to the additional stamp duty rate that comes if you're purchasing from overseas ? And is there any way as a returning UK citizen to get around this ?
Thanks in advance.

Pulaski

The stamp duty surcharge is assessed based on you owning another home, even if it is in another country and you "intend" to sell it. So, if you want to avoid the stamp duty surcharge, it is imperative to sell your other home before buying in the UK.

Baggist

Yes, thanks for that.
My question really is if I sell the overseas home during this tax year (2023-24 ) and buy a UK home before declaring tax residency for tax year 2024-25 will it incur the stamp duty surcharge ?

christmasoompa

Whether you declare tax residency or not makes no difference. Anybody that's not tax resident in the UK still has to pay the higher rate SDLT if they purchase multiple properties there.

But if your properties do overlap, you can claim the extra stamp duty back at a later date if eligible - https://www.gov.uk/government/public...nal-properties

HTH.

Baggist

Thanks.
Final question - am I right the surchage is 2% up to the first £250,000 so £5,000 on any property up to £700,000 not on the entire £700K ?

christmasoompa

It's 3% additional, and you pay it on all bands i.e. the £0 to £250k band which is zero rated for your first property would be 3%, the £250k to £700k would be 5% on a first property, so 8% for the second.

And I should just clarify that when I said your tax residency didn't matter, I was referring to the additional 3% on the second property, not in general - if you weren't tax resident in the UK you'd pay an even higher rate usually.

This may help - https://www.tax.service.gov.uk/calcu...d-tax/#!/intro