Q I was wondering if, under the new stamp duty laws for second properties, it would be worthwhile considering a divorce before purchasing? My husband does not own any property and we are considered purchasing a home together. I do, however, own property and intend to rent out our current home (which is solely in my name) when we move. Under the new laws, we would have to pay stamp duty of £25,800 each (£51,600 in total) on our new property.
I know that in any circumstance I am subject to the additional stamp duty, but I understand that if we were not married my husband would not be. Is it feasible to get a divorce if we are still cohabiting and in a relationship? I would appreciate your information – it seems that unmarried couples are at an advantage in this circumstance. RB
A Do I think you should go through a fake divorce to save on stamp duty land tax (SDLT)? In a word: no. The main reason is that, according to Jacqueline Major, head of the family team at divorce lawyers, Hodge, Jones & Allen, to be able to divorce, “you must show that the marriage has irretrievably broken down and rely on one of the following in support: adultery; unreasonable behaviour; two years’ separation with consent to divorce; two years’ desertion; five years’ separation without consent.”
If you are still living together and in a relationship, proving that your marriage has irretrievably broken down is going to be tricky without resorting to telling untruths.
Another reason for not divorcing is that if you and your husband are buying your new home jointly, being unmarried is not going to help.
The advantage unmarried couples have is that if one owns his or her own property, it isn’t taken into account if the other partner also buys property in his or her sole name.
So if you were not married, your partner would have to be buying your new family home in his name only to get round the higher rate of tax.
Each individual owns only one property so the higher rate of SDLT for second properties does not apply. In the same circumstances, a married couple would have to pay the higher rate of SDLT on the second property. This is because the two people in a married couple or civil partnership are treated as one for the purposes of working out whether the higher rates of SDLT on second properties are payable.
However, if either half of an unmarried couple already has property and they decide to buy another property in joint names, they would be in exactly the same position as a married couple because the higher rate of SDLT would be applied to the second property. The same is true where a parent who already owns a home buys a property jointly with a child to help them on to the property ladder.
