It may be cheaper to get a divorce than to pay stamp duty, some married couples have suggested.
Stamp duty is a tax which must be paid whenever someone buys a property valued at more than £125,000. There is also an extra charge for anyone who buys a second home.
Under the current rules, married couples are classed as a single unit when they buy property even if only one spouse is listed as the owner. This means that if one partner has to pay stamp duty, any properties the other buys will be taxable even if they cost less than £125,000. By contrast, cohabiting couples have the option to put a new property in one person’s name so the other can avoid additional charges.
Married couples affected by this tax have said it could create an incentive to divorce. Speaking to the Telegraph, a healthcare worker formerly based in London claimed she and her husband “could save £20,000 by getting divorced”.
The 33 year-old owned her own flat in the capital but moved to Manchester in 2008 to live with her husband in a house he owns. She kept her London property to let out following the move north. The couple planned to sell the house they currently live in and buy a new one together. However, because they are married, the London flat counts as joint property so they would be liable for stamp duty when they purchase a new home together.
If they were unmarried or divorced, by contrast, this charge would not be payable.
The stamp duty rules are “confusing and contradictory”, the woman said, and have made the entire experience “incredibly frustrating and stressful” for the couple.
Interesting article; thank you. But sort of amusing; marriage lumps together the couples assets which has tax and plenty of other benefits. This is one downside of lumping together the assets/finances/risks/etc; but how else should the situation be treated? By not being married the co-inhabiting persons (without marriage) are separate legally for these purposes, married couples not. You make your choices …