My blog of 22nd March (“Osborne surcharges Granny”) made the point that this year’s Budget was bad news for those wanting to live in close proximity to relatives who want a measure of independence. The Daily Telegraph took up the story on All Fool’s Day and the Treasury Secretary carried out his volte face in the House of Commons eleven days later, saying:
“I have been made aware that the Bill as drafted might lead to some main houses with an annexe for older relatives attracting the higher rates of SDLT intended to apply to additional properties. [….] I am happy to reassure the House that that is not our intention and the Government will table an amendment in Committee to correct the error and ensure fair treatment for annexes.”
Since that announcement neither Mr. Gauke nor his Ministry nor HMRC has seen fit to say anything in public at all. But according to the BBC and many others of the Fourth Estate, the Treasury had plenty to say in private to the media. Here’s an edited version of what the BBC says it has been told:
“Any annex that is worth less than one third of the total property value will no longer qualify for the extra charge. So if someone buys a home worth £300,000 – with an annex worth £100,001 – they will face a Stamp Duty [sic] bill of £14,000.
To be liable for the higher rate, annexes must also:
- be capable of being sold separately from the main house,
- have their own entrance,
- have their own water and electricity supply,
- receive their own Council Tax bill,
- be worth more than £40,000 on their own.
However, where a home with an annex or cottage does qualify for the Stamp Duty surcharge, the higher rate applies to the value of the whole property, not just the annex.
The Treasury said that anyone who had paid too much would now be able to apply for a refund.”
Of course it makes perfect sense to tell the BBC what’s going on. It’s the first port of call for any one moving house and wanting expert advice on their tax liabilities. Telling the solicitors and conveyancers who actually operate the conveyancing process is obviously a complete waste of time. So, if you want tax advice on your forthcoming purchase of a dwelling, the man to go to is Simon Jack, Robert Peston’s successor as Business Editor at the BBC. If he’s too busy, try Hilary Osborne at the Guardian.
But before you do, you might want to check how much professional indemnity cover they have.