Valentine's Day is on the horizon but recent tax regime changes mean that it might not feel like love is in the air for those couples planning on purchasing property after 31 March.
The Association of Taxation Technicians (ATT) has warned that couples could unwittingly find themselves subject to government's new three per cent surplus charge on stamp duty land tax (SDLT) if one member of the couple already owns another residential property.
The ATT pointed out that the tax oddity comes about because married couples and those in a civil partnership, but not couples who are cohabiting, will be treated as a single unit under the new rules.
"This ‘Cupid Tax’ is both unfair and flawed," remarked Yvette Nunn, co-chair of ATT’s Technical Steering Group. "The government’s tax on marriage and civil partnerships goes against the principle of legal ownership and risks eroding the foundation of independent taxation if it goes ahead."
The ATT is arguing that it would be both simpler and fairer for the new SDLT rules to follow the income tax system, which treats the financial affairs of partners in a couple as independent from one another.
The Association has also warned that the new charge could have a negative impact on those who find themselves stuck in a bridging loan situation, which would most likely apply where they have completed the purchase of their new home but have not yet been able to complete the sale on their old house.
Nunn continued: "Overall, we believe that the proposed design of this charge will go further and will catch more situations than was originally perceived when George Osborne first announced this measure last November."
The additional three per cent SDLT charge on those purchasing a buy-to-let property or a second home was unveiled in last November's Autumn Statement.
Shortly after the announcement, chartered accountant Blick Rothenberg slammed the new measure, stating that the new rule would hurt tenants much more than it would landlords.