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  • FIRST POST
    • dollyxdimple
    • By dollyxdimple 20th Sep 16, 12:02 AM
    • 10Posts
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    dollyxdimple
    A2 Charge and new stamp duty enquiry (bit complicated)
    • #1
    • 20th Sep 16, 12:02 AM
    A2 Charge and new stamp duty enquiry (bit complicated) 20th Sep 16 at 12:02 AM
    Hi, this might be a bit complicated, so I'll try and keep it brief and would be so grateful for any advice.

    Currently my husband and I live together in a property that I own. I brought the property after we were married and had to get the mortgage in my single name because my husband was still on a mortgage with his ex wife (even though the court ordered her to 'use her best endevours' to remove him from it. She basically never applied for him to be taken off and we cannot force her to do so).

    Also, she continually threatens to default on the joint mortgage they have together and we were concerned about my husband owning another property in case she did default and the bank tried to come after our property to get their money.

    So recently I phoned First Direct (who I have my current mortgage with) to see if I could borrow any more money on my own so we could maybe buy a bigger place and they asked why I was not applying for a joint mortgage with my husband. I explained all of the above. First Direct (the wonders that they are) explained to me that we could apply for an A2 Charge on their mortgages, whereby both my husband and I would be jointly responsible for the mortgage (so both our salaries are taken into account - hurrah) but only my name would be on the deeds (thereby the property would not actually belong to my husband - meaning SHE could have no claim on it or it could not be seen as an asset of my husbands if she defaults). Brilliant, all our woes are over. First Direct did a mortgage interview for us both as joint mortgagees (is that a word?) and have sent us a decision in principle with an amount that means we can now buy a bigger property (we are currently in a small 2 bed flat and would like to upgrade to a 2 bed house). So all is good and off we go looking at properties.......

    However, we have now discovered that stamp duty has gone up if the property purchased is a second home. The price of properties we are looking at would mean a jump from about 6,000 stamp duty to 16,000!!! Because this would technically be a 2nd home for my husband as he already 'owns' another property. I put the word 'owns' in inverted commas because it is in it's loosest term. He basically is on the mortgage for a property he cannot live in, cannot sell and cannot remove himself from. Sigh.

    But, and this is my question, if we did the A2 Charge mortgage with FD, whereby he would be on the mortgage but not on the deeds, would we still get hit with the higher rate of stamp duty as technically he would not own the new house we brought. He would be responsible for paying the mortgage but have no legal ownership rights to the property? (We are aware we need to see a solicitor to draw up a declaration of trust regarding this).

    Anyone have any clue where we stand with this? So sorry for long winded question, but finding it hard to find any solid info online as A2 charge mortgages are very rare and the higher rate of SD only came in recently so there doesn't seem to be any info out there at moment for this set of circumstances.

    Thanks in advance for any help or advice.
Page 1
    • mrginge
    • By mrginge 20th Sep 16, 7:45 AM
    • 3,126 Posts
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    mrginge
    • #2
    • 20th Sep 16, 7:45 AM
    • #2
    • 20th Sep 16, 7:45 AM
    Can you clarify. Is your husband named on the deeds of the first property?
    • amnblog
    • By amnblog 20th Sep 16, 8:10 AM
    • 8,644 Posts
    • 3,235 Thanks
    amnblog
    • #3
    • 20th Sep 16, 8:10 AM
    • #3
    • 20th Sep 16, 8:10 AM
    The key info here is 'only my name would be on the deeds'

    Speak to a solicitor. It sounds to me like your husband will not be involved in ownership of this new property.
    I am a Mortgage Broker

    You should note that this site doesn't check my status as a Mortgage Broker, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
    • dollyxdimple
    • By dollyxdimple 22nd Sep 16, 1:40 PM
    • 10 Posts
    • 1 Thanks
    dollyxdimple
    • #4
    • 22nd Sep 16, 1:40 PM
    • #4
    • 22nd Sep 16, 1:40 PM
    Thanks for your replies. Mrginge, yes my husbands name is on the deeds of the property he purchased with his ex wife. Thanks in advance.
    • TrickyDicky101
    • By TrickyDicky101 22nd Sep 16, 2:37 PM
    • 2,430 Posts
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    TrickyDicky101
    • #5
    • 22nd Sep 16, 2:37 PM
    • #5
    • 22nd Sep 16, 2:37 PM
    I think you would be liable to the higher rate SDLT as you are a married unit.

    The guidance notes here:

    https://www.google.co.uk/url?sa=t&rct=j&q=&esrc=s&source=web&cd=3&cad=rja&u act=8&ved=0ahUKEwj4neeziqPPAhXBCcAKHZfWBesQFggtMAI &url=https%3A%2F%2Fwww.gov.uk%2Fgovernment%2Fuploa ds%2Fsystem%2Fuploads%2Fattachment_data%2Ffile%2F5 09184%2FGuidanceNote_Final.pdf&usg=AFQjCNHyQsjtwvq Kgf6Hdgj49HUkCv4aBA

    on page 13 of 29 cover the circumstances for married couples. The fact your husband is not on the deeds (title registry) is irrelevant.
    • AnotherJoe
    • By AnotherJoe 22nd Sep 16, 2:49 PM
    • 3,508 Posts
    • 3,555 Thanks
    AnotherJoe
    • #6
    • 22nd Sep 16, 2:49 PM
    • #6
    • 22nd Sep 16, 2:49 PM
    I think you would be liable to the higher rate SDLT as you are a married unit.

    The guidance notes here:

    https://www.google.co.uk/url?sa=t&rct=j&q=&esrc=s&source=web&cd=3&cad=rja&u act=8&ved=0ahUKEwj4neeziqPPAhXBCcAKHZfWBesQFggtMAI &url=https%3A%2F%2Fwww.gov.uk%2Fgovernment%2Fuploa ds%2Fsystem%2Fuploads%2Fattachment_data%2Ffile%2F5 09184%2FGuidanceNote_Final.pdf&usg=AFQjCNHyQsjtwvq Kgf6Hdgj49HUkCv4aBA

    on page 13 of 29 cover the circumstances for married couples. The fact your husband is not on the deeds (title registry) is irrelevant.
    Originally posted by TrickyDicky101
    I disagree, the OP would be replacing her main residence, which is exempt. Now, if husband and wife are treated as single unit then he is also replacing his main residence even if not on the deeds. They can't have it both ways, if they are treated as single unit then either nothing changes, he only owns one property (the one with ex) or he's replacing his main residence (exempt)
    • TrickyDicky101
    • By TrickyDicky101 22nd Sep 16, 3:04 PM
    • 2,430 Posts
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    TrickyDicky101
    • #7
    • 22nd Sep 16, 3:04 PM
    • #7
    • 22nd Sep 16, 3:04 PM
    Well, we will have to disagree - it would be useful if Booksurr would post into the thread as he does seem to be well versed in most things tax.

    Edit: on second thoughts I can see your reasoning. Still like it confirmed though.
    Last edited by TrickyDicky101; 22-09-2016 at 3:14 PM.
    • dollyxdimple
    • By dollyxdimple 25th Sep 16, 1:08 PM
    • 10 Posts
    • 1 Thanks
    dollyxdimple
    • #8
    • 25th Sep 16, 1:08 PM
    • #8
    • 25th Sep 16, 1:08 PM
    Well, we will have to disagree - it would be useful if Booksurr would post into the thread as he does seem to be well versed in most things tax.

    Edit: on second thoughts I can see your reasoning. Still like it confirmed though.
    Originally posted by TrickyDicky101
    Thank you all so much for your replies. Sorry it has taken me a little while to get back to you all with my thanks, for some reason I don't get email updates when I receive a reply, so I didn't know I had any until I looked last night!

    I would really love to hear from Booksurr as well, if he could shed some final light on this it would be really appreciated.
    • Thrugelmir
    • By Thrugelmir 25th Sep 16, 4:12 PM
    • 49,954 Posts
    • 41,613 Thanks
    Thrugelmir
    • #9
    • 25th Sep 16, 4:12 PM
    • #9
    • 25th Sep 16, 4:12 PM
    Thank you all so much for your replies. Sorry it has taken me a little while to get back to you all with my thanks, for some reason I don't get email updates when I receive a reply, so I didn't know I had any until I looked last night!

    I would really love to hear from Booksurr as well, if he could shed some final light on this it would be really appreciated.
    Originally posted by dollyxdimple
    Post you question on the tax forum.
    A man is rich who lives upon what he has. A man is poor who lives upon what is coming. A prudent man lives within his income, and saves against a rainy day.
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