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    • Strebor123
    • By Strebor123 14th Mar 17, 1:41 PM
    • 68Posts
    • 17Thanks
    Strebor123
    Stamp Duty - Additional Rate
    • #1
    • 14th Mar 17, 1:41 PM
    Stamp Duty - Additional Rate 14th Mar 17 at 1:41 PM
    Hi,

    I'm having a bit of trouble getting my head around the new stamp duty rules and wondered if anyone could clarify.

    I want to buy a home as my main residence and will be selling my current house. I'd like to buy somewhere with my Dad but not sure it's going to be feasible.

    My Dad already owns other property. If I wanted to buy a house for £140K and he wanted a 10% share (£14K) would we need to pay the higher rate of stamp duty?

    In a different scenario - If I bought the house on my own and then, later on, sold 10% of the house to my Dad - what stamp duty (if any) would need to be paid?

    Thanks in advance.
Page 1
    • Pixie5740
    • By Pixie5740 14th Mar 17, 1:50 PM
    • 10,626 Posts
    • 14,603 Thanks
    Pixie5740
    • #2
    • 14th Mar 17, 1:50 PM
    • #2
    • 14th Mar 17, 1:50 PM
    Which part of HMRC's guidance are you having trouble getting your head around?

    If you require a mortgage to buy this property then requiring a joint mortgage with your father is going to be more of a stumbling block than SDLT.
    Annual income twenty pounds, annual expenditure nineteen pounds nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds nought and six, result misery.
    • Strebor123
    • By Strebor123 14th Mar 17, 1:51 PM
    • 68 Posts
    • 17 Thanks
    Strebor123
    • #3
    • 14th Mar 17, 1:51 PM
    • #3
    • 14th Mar 17, 1:51 PM
    Why would getting a joint mortgage prove difficult?
    • Slinky
    • By Slinky 14th Mar 17, 1:52 PM
    • 4,345 Posts
    • 17,893 Thanks
    Slinky
    • #4
    • 14th Mar 17, 1:52 PM
    • #4
    • 14th Mar 17, 1:52 PM
    For 10% share, is it really worth the hassle?
    • Strebor123
    • By Strebor123 14th Mar 17, 1:53 PM
    • 68 Posts
    • 17 Thanks
    Strebor123
    • #5
    • 14th Mar 17, 1:53 PM
    • #5
    • 14th Mar 17, 1:53 PM
    Also, page 8. If the chargeable consideration is £40K or less it seems that the higher rate is not payable. 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? And would this apply if he bought a 10% share off me later down the line?
    • kingstreet
    • By kingstreet 14th Mar 17, 1:54 PM
    • 31,593 Posts
    • 16,877 Thanks
    kingstreet
    • #6
    • 14th Mar 17, 1:54 PM
    • #6
    • 14th Mar 17, 1:54 PM
    Why would getting a joint mortgage prove difficult?
    Originally posted by Strebor123
    Ownership of other property/affordability

    Age/term

    Not living in this property presumably.
    I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, 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. Please do not send PMs asking for one-to-one-advice, or representation.
    • Strebor123
    • By Strebor123 14th Mar 17, 1:55 PM
    • 68 Posts
    • 17 Thanks
    Strebor123
    • #7
    • 14th Mar 17, 1:55 PM
    • #7
    • 14th Mar 17, 1:55 PM
    For 10% share, is it really worth the hassle?
    Originally posted by Slinky

    Yes it would help. Him having that share would free up that money for me to spend on the house. It would take a fairly long time to get money together to do a place up without the lump sum.
    Last edited by Strebor123; 14-03-2017 at 1:57 PM. Reason: inc quote
    • Strebor123
    • By Strebor123 14th Mar 17, 1:56 PM
    • 68 Posts
    • 17 Thanks
    Strebor123
    • #8
    • 14th Mar 17, 1:56 PM
    • #8
    • 14th Mar 17, 1:56 PM
    Ownership of other property/affordability

    Age/term

    Not living in this property presumably.
    Originally posted by kingstreet
    Affordability isn't an issues. I earn enough to buy a house of this value on my own and my Dad does too. His age poses a minor issue that we can only have a 19 year term if he buys with me, but that's fine. What issue would him not living in the property pose?
    • davidmcn
    • By davidmcn 14th Mar 17, 1:58 PM
    • 5,425 Posts
    • 5,126 Thanks
    davidmcn
    • #9
    • 14th Mar 17, 1:58 PM
    • #9
    • 14th Mar 17, 1:58 PM
    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?
    Originally posted by Strebor123
    The former. See 3.4.2.

    Re. the mortgage - will your dad still be working by the end of the mortgage term? Is he going to be living with you?
    • Strebor123
    • By Strebor123 14th Mar 17, 2:03 PM
    • 68 Posts
    • 17 Thanks
    Strebor123
    The former. See 3.4.2.

    Re. the mortgage - will your dad still be working by the end of the mortgage term? Is he going to be living with you?
    Originally posted by davidmcn
    Thanks. So it seems like that option is out as the stamp duty would be too much for it to be worth doing.

    Would these same criteria still apply if he buys a 10% stake off me later down the line?

    My Dad is planning on retiring at 67. He is currently 56. Nationwide have a maximum age of 75 and my Dad has a few properties that provide rental income and his pension would also probably pass affordability criteria for when he retires.
    • sparky130a
    • By sparky130a 14th Mar 17, 2:09 PM
    • 638 Posts
    • 772 Thanks
    sparky130a
    Is someone having a laugh?

    I've never seen so many plans to try to circumnavigate a bit of tax on one board...
    • Strebor123
    • By Strebor123 14th Mar 17, 2:13 PM
    • 68 Posts
    • 17 Thanks
    Strebor123
    Is someone having a laugh?

    I've never seen so many plans to try to circumnavigate a bit of tax on one board...
    Originally posted by sparky130a
    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
    • By AnotherJoe 14th Mar 17, 2:16 PM
    • 6,891 Posts
    • 7,329 Thanks
    AnotherJoe
    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
    • By sparky130a 14th Mar 17, 2:25 PM
    • 638 Posts
    • 772 Thanks
    sparky130a

    I could have a new bathroom for the cost of the additional rate stamp duty.
    Originally posted by Strebor123
    Good. Get a new bathroom and stop involving your father who has multiple properties.
    • Strebor123
    • By Strebor123 14th Mar 17, 3:04 PM
    • 68 Posts
    • 17 Thanks
    Strebor123
    Good. Get a new bathroom and stop involving your father who has multiple properties.
    Originally posted by sparky130a
    Not sure what your issue is?
    • POPPYOSCAR
    • By POPPYOSCAR 14th Mar 17, 3:14 PM
    • 10,346 Posts
    • 21,398 Thanks
    POPPYOSCAR
    Not sure what your issue is?
    Originally posted by Strebor123
    Jealousy possibly?
    • Strebor123
    • By Strebor123 14th Mar 17, 4:18 PM
    • 68 Posts
    • 17 Thanks
    Strebor123
    Jealousy possibly?
    Originally posted by POPPYOSCAR
    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
    • By xylophone 14th Mar 17, 4:27 PM
    • 22,015 Posts
    • 12,696 Thanks
    xylophone
    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
    • By sparky130a 14th Mar 17, 4:30 PM
    • 638 Posts
    • 772 Thanks
    sparky130a
    Jealousy possibly?
    Originally posted by POPPYOSCAR
    I can assure you not.
    • davidmcn
    • By davidmcn 14th Mar 17, 5:18 PM
    • 5,425 Posts
    • 5,126 Thanks
    davidmcn
    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?
    Originally posted by Strebor123
    The former.
    Originally posted by davidmcn
    So it seems like that option is out as the stamp duty would be too much for it to be worth doing.
    Originally posted by Strebor123
    Eh? I thought we had just established that you didn't need to pay the higher rate?
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