The first thing to consider is whether the husband will be treated as non-resident for SDLT purposes and, as such, liable to the increased rates for non-resident transactions. Individual buyers are non-UK resident in relation to the transaction if they are not present in the UK for at least 183 days during the 12 months before their purchase. The husband will, therefore, be treated as non-resident. However, FA 2003 Sch 9A para 12 states that where spouses purchase a property jointly, and only one is UK resident, if they are ‘living together’ then the non-resident spouse is treated as UK resident and, thus, there is no increased rate for the spouse residing abroad. Are they classed as ‘living together’ if each lives in a different country to the other? For SDLT purposes this definition is found at ITA 2007 s1011 which states –
“Individuals who are married to, or are civil partners of, each other are treated for the purposes of the Income Tax Acts as living together unless–
(a)they are separated under an order of a court of competent jurisdiction,
(b)they are separated by deed of separation, or
(c)they are in fact separated in circumstances in which the separation is likely to be permanent.”
Therefore, they will be both be treated as UK resident for SDLT purposes, the increased rates for non-resident transactions will not be due.
Having established this, you then need to consider if the higher rates for additional dwellings will be due. The additional 3% will apply to the acquisition of a major interest in a single dwelling if, at the end of the day of the new purchase, conditions A to D of FA 2003 Sch 4ZA para 3 are met, these are –
“3(2) Condition A is that the chargeable consideration for the transaction is £40,000 or more.
3(3) Condition B is that on the effective date of the transaction the purchased dwelling–
(a)is not subject to a lease upon which the main subject-matter of the transaction is reversionary, or
(b)is subject to such a lease but the lease has an unexpired term of no more than 21 years.
3(4) Condition C is that at the end of the day that is the effective date of the transaction–
(a)the purchaser has a major interest in a dwelling other than the purchased dwelling,
(b)that interest has a market value of £40,000 or more, and
(c)that interest is not reversionary on a lease which has an unexpired term of more than 21 years.
3(5) Condition D is that the purchased dwelling is not a replacement for the purchaserʼs only or main residence.”
You can see that whilst the conditions would be met for the wife, the husband is not replacing his only or main residence (as he lives in the overseas property). FA 2003 Sch 4ZA para 2(3) states that if the conditions are not met by one of the joint purchasers, then it is a higher rates transaction, so unfortunately in this situation the higher rates for additional dwellings will actually be due.
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