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Stamp Duty - Additional Rate

2

Comments

  • Strebor123
    Strebor123 Posts: 100 Forumite
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    sparky130a wrote: »
    Is someone having a laugh?

    I've never seen so many plans to try to circumnavigate a bit of tax on one board...

    It's not like I'm asking to do something illegally. I just want to know if there's a way of avoiding it as it's not "a bit of tax"

    I could have a new bathroom for the cost of the additional rate stamp duty.
  • AnotherJoe
    AnotherJoe Posts: 19,622 Forumite
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    1. Your dad loans you £14k to be secured as a second charge on the property, with conditions as to its repayment.
    2. You buy the house.

    A small set of lenders will allow this, Nationwide and Santander the two i know through personal experience. (I am the dad in this scenario)

    That way your dad is never an owner and secodn charge for SDLT never comes into play.
  • sparky130a
    sparky130a Posts: 660 Forumite
    Strebor123 wrote: »

    I could have a new bathroom for the cost of the additional rate stamp duty.

    Good. Get a new bathroom and stop involving your father who has multiple properties.
  • Strebor123
    Strebor123 Posts: 100 Forumite
    First Anniversary First Post Combo Breaker
    sparky130a wrote: »
    Good. Get a new bathroom and stop involving your father who has multiple properties.

    Not sure what your issue is?
  • POPPYOSCAR
    POPPYOSCAR Posts: 14,897 Forumite
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    Strebor123 wrote: »
    Not sure what your issue is?

    Jealousy possibly?
  • Strebor123
    Strebor123 Posts: 100 Forumite
    First Anniversary First Post Combo Breaker
    POPPYOSCAR wrote: »
    Jealousy possibly?

    If it makes the dude feel any better, I don't want to sell my current house and get more help from my Dad but I've been lumped in a pretty crappy situation lol
  • xylophone
    xylophone Posts: 44,232 Forumite
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    Is your father in a position to make you a gift of the cash for a new bathroom as a PET?

    http://www.pruadviser.co.uk/content/knowledge/technical-centre/potentially-exempt-transfers-facts/

    From what you have said his estate is likely to give rise to a hefty IHT bill?
  • sparky130a
    sparky130a Posts: 660 Forumite
    POPPYOSCAR wrote: »
    Jealousy possibly?

    I can assure you not.
  • davidmcn
    davidmcn Posts: 23,596 Forumite
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    Strebor123 wrote: »
    If my Dad has a 10% share which equates to £14K does this mean we don't pay the higher rate, or is the chargeable consideration the whole value of the property?
    davidmcn wrote: »
    The former.
    Strebor123 wrote: »
    So it seems like that option is out as the stamp duty would be too much for it to be worth doing.

    Eh? I thought we had just established that you didn't need to pay the higher rate?
  • booksurr
    booksurr Posts: 3,700 Forumite
    edited 15 March 2017 at 11:58AM
    davidmcn wrote: »
    Eh? I thought we had just established that you didn't need to pay the higher rate?
    eh?

    2.4.2 establishes that:
    A) the purchase is a single transaction for joint purchasers (even if it was "split" it would be a linked transaction) with a (total) chargeable consideration >40k

    B) we will assume it is not a leasehold property

    C) the father owns multiple properties at least one of which we will assume is worth >40k

    D) the purchase is not a new main home for father

    so father causes the joint purchase to be a higher rate transaction, have you perhaps overlooked the next para?
    3.4.3 ......It does not matter how small the interest of a particular purchaser is, the test is applied in the same manner.
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