Divorcing couples and the Chancellor’s Budget – Stamp Duty Land Tax (SDLT)

28 / 12 / 2017

In November 2017 the announcement of the Chancellor’s Budget was no doubt welcomed by some.

Currently, indeed, since April 2016, due to Schedule 4ZA of the Finance Act 2003, individuals who purchase a residential property and purchase another (where they are not replacing their main home) are subjected to paying 3% more in Stamp Duty Land Tax (3% above the standard rates). This often affected divorcing couples as it is not unusual for the former family home to be retained with one person living in that property until a later date (perhaps until the children reach majority) but the person who is moving out to want to buy another home.

The Government announced that changes will be made to Schedule 4ZA (brought about by the introduction of the Legislation in Finance Bill 2017-18)  and have confirmed that the amendments will “disregard certain interests retained by a former spouse or former civil partner upon dissolution of a marriage or partnership – it disregards an interest if it is held under certain ‘property adjustment orders’, for example in the case of a divorce” resulting in relief from the additional 3% in Stamp Duty Land Tax in those circumstances. The wording however does refer to “a divorce related court order” so it is thought that this will only apply where there is an actual Court Order in place – rather than simply an agreement between the divorcing parties. We would, in any event, usually recommend divorcing couples get any such agreement embodied within a Court Order to offer protection to them.