SDLTM09812 - SDLT - higher rates for additional dwellings: Meaning of 'main residence'

To be a replacement of a main residence within Condition D the old property must be disposed of. To meet this requirement, it must have been owned by the purchaser of the new property or their spouse /civil partner, as well as occupied by them as their main residence (see SDLTM09800.)

Where a purchaser previously lived in accommodation which they (or their spouse or civil partner) did not own, then moving out of this accommodation does not count as replacing their main residence for the purpose of Condition D.

In cases where an individual resides at only one dwelling, that will be their only or main residence.

Where an individual resides at more than one dwelling, all the facts and circumstances of the particular case must be considered in order to conclude which residence is the main residence. The rules do not allow an individual to nominate which dwelling is their main residence.

The main residence is not necessarily the residence where the individual spends the majority of their time, although it commonly will be. This question was considered in the case of Frost v Feltham (55TC10) and the High Court decision in this case sets out a useful summary of the criteria to be applied. Nourse J comments in the decision,

If someone lives in two houses the question, which does he use as the principal or more important one, cannot be determined solely by reference to the way in which he divides his time between the two.

The following list of points to consider, although not exhaustive, may be useful in establishing which residence is an individual’s main residence,

• If the individual is married or in a civil partnership, where does the family spend its time?
• If the individual has children, where do they go to school?
• At which residence is the individual registered to vote?
• Where is the individual’s place of work?
• How is each residence furnished?
• Which address is used for correspondence?
• Where is the individual registered with a doctor / dentist?
• At which address is the individual’s car registered and insured?
• Which address is the main residence for council tax?

Merely occupying a property will not in itself make it a main residence. There needs to be a permanence and expectation of continuation to the occupation to establish it as a main residence.

The test for the old dwelling is a question of objective fact, was the dwelling at some point in a period the only or main residence of the individual who disposed of it?

The test in respect of the new dwelling purchased is a question of intention, does the purchaser intend the dwelling to be his only or main residence? This is a question of intention at the time of purchase. What has the purchaser acquired the property for? The intention test will not only be met if there is an intent to immediately occupy, if some works are to be undertaken before occupation commences, or a short lease is in place before purchase, then this does not prevent the test from being met. If the dwelling is intended to be put to other uses, for example as a source of income, then the intention test will not be met. There may be rare cases of the purchaser’s genuine intention at the time of purchase being frustrated by events.

For the purpose of identifying whether condition D is met, the above tests only apply to property owned by the purchaser or their spouse/civil partner.