The pandemic means that couples may have made arrangements to separate involving selling their joint home and purchasing another. However, the housing market could not be more unpredictable with transactions frequently falling through as properties are withdrawn from the market, conveyancing chains collapse and mortgage offers are no longer sustainable.

The desire to separate means that one party may still decide to go ahead with a purchase of a second property which can involve a higher rate of Stamp Duty Land Tax (SDLT) on the new transaction.

SDLT is payable when there is a chargeable land transaction.

Different rules apply for marriage and civil partnerships and certain transactions made in connection with a relationship breakdown are exempt from SDLT.

Where a spouse or civil partner makes a gift of property to the other spouse/civil partner, generally no charge to SDLT will arise because there will be no chargeable consideration. However, if the property being transferred is subject to a mortgage or charge, SDLT may arise as the assumption of responsibility for an existing debt by the recipient (transferee) will constitute chargeable consideration on which SDLT must be paid.

A transaction is exempt from SDLT when it is made in connection with the end of a marriage or a civil partnership. Usually that would involve the transfer of the home from joint to sole ownership. In such cases, SDLT is not payable and the transaction will generally be effected:-

  • Pursuant to a court order made: –
    • On granting a decree of divorce, nullity of marriage or judicial separation
    • In connection with the dissolution or annulment of the marriage, or a judicial separation, at any time after the granting of such decree
    • At any time made under certain matrimonial legislation, or
  • At any time pursuant to an agreement of the parties made in contemplation of:
    • The dissolution or annulment of the marriage
    • Juridical separation or
    • The making of a separation order

So this would include a deed of separation.

Similar exemptions are available for the ending of a civil partnership, following civil partnership legislation in December 2005.