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    • digitalguy
    • By digitalguy 7th Sep 17, 8:16 PM
    • 3Posts
    • 0Thanks
    digitalguy
    Stamp Duty - Transfer of Equity
    • #1
    • 7th Sep 17, 8:16 PM
    Stamp Duty - Transfer of Equity 7th Sep 17 at 8:16 PM
    Hi everyone - hoping someone can give me a definitive answer as my solicitor and financial adviser (and google/hmrc!) are all giving me conflicting information!

    Me and my partner are not married but are cohabiting.
    Partner owns 2 houses (both mortgaged before the April 2016 Stamp duty changes) in sole name only. 1 house is rented out and 1 is main residence, where we both live.
    I own no properties,

    The fixed rate mortgage term is up on the main residence so it is being remortgaged, however we decided to rermortgage in joint names instead of just my partners name. Solicitor says this is a transfer of equity.

    Value of house is 270k with a remortgage value of 202k. I am not paying my partner for my half of the 68k equity in the house - this is being gifted to me by my partner.

    At the end of the transaction my partner will still own 2 houses, 1 in sole name, 1 in joint with me. I will then own 1 property in joint names with my partner.

    Is the transaction subject to stamp duty - and if so would it be at the higher rate?

    Please help!!

    Thanks
Page 1
    • POPPYOSCAR
    • By POPPYOSCAR 7th Sep 17, 8:22 PM
    • 10,822 Posts
    • 22,548 Thanks
    POPPYOSCAR
    • #2
    • 7th Sep 17, 8:22 PM
    • #2
    • 7th Sep 17, 8:22 PM
    My understanding is because there is a mortgage involved you will be liable for stamp duty.

    http://www.coles-law.co.uk/news/tax-for-transferring-a-property
    • digitalguy
    • By digitalguy 7th Sep 17, 8:39 PM
    • 3 Posts
    • 0 Thanks
    digitalguy
    • #3
    • 7th Sep 17, 8:39 PM
    • #3
    • 7th Sep 17, 8:39 PM
    Thanks for the reply - I did see that page whilst searching Google, however if my half of the 202k mortgage is 101k, that is lower than the 125k threshold so would be 0% - unless it would be charged at higher rate stamp duty because my partner owned 2 properties even though i only own 1? Then it sounds like it'd be 3% of 101k?
    • kinger101
    • By kinger101 7th Sep 17, 8:56 PM
    • 3,942 Posts
    • 5,392 Thanks
    kinger101
    • #4
    • 7th Sep 17, 8:56 PM
    • #4
    • 7th Sep 17, 8:56 PM
    My interpretation would be that no SDLT would be payable on this.

    Firstly, I'll tackle the question of the higher rate (as this applies to all transactions over £40K)

    According to FA 2016 S128 para 2(3)

    In the case of a transaction where there are two or more purchasers—

    (a) take one of the purchasers and determine, having regard to that purchaser only, whether the transaction falls within any of paragraphs 3 to 7, and
    (b) do the same with each of the other purchasers. If the transaction falls within any of those paragraphs when having regard to any one of the purchasers it is a “higher rates transaction” (otherwise it is not).


    You are gaining an interest in your first and only property, so the additional SDLT does not apply. Your other half is not purchasing a property at all so the SDLT does not apply to them either

    You're under the rules for normal SDLT, but as the consideration is half of the mortgage debt (£101K), then you're below the £125K threshold.

    Really you need an accountant or tax advisor to go over this though and tell you if I'm talking rubbish or not. I'd never trust tax advice from a conveyancing solicitor or financial advisor. Or some random bloke on the internet.
    Last edited by kinger101; 07-09-2017 at 8:59 PM.
    • POPPYOSCAR
    • By POPPYOSCAR 7th Sep 17, 9:04 PM
    • 10,822 Posts
    • 22,548 Thanks
    POPPYOSCAR
    • #5
    • 7th Sep 17, 9:04 PM
    • #5
    • 7th Sep 17, 9:04 PM
    Thanks for the reply - I did see that page whilst searching Google, however if my half of the 202k mortgage is 101k, that is lower than the 125k threshold so would be 0% - unless it would be charged at higher rate stamp duty because my partner owned 2 properties even though i only own 1? Then it sounds like it'd be 3% of 101k?
    Originally posted by digitalguy
    I cannot see why you would have to pay the higher rate as it would be your first property.

    What have HMRC said?
    • 00ec25
    • By 00ec25 8th Sep 17, 1:29 AM
    • 5,369 Posts
    • 4,715 Thanks
    00ec25
    • #6
    • 8th Sep 17, 1:29 AM
    • #6
    • 8th Sep 17, 1:29 AM
    Your "partner" appears not to be married to you so as Kinger said the rules around joint purchasers do not apply since he is not a purchaser. Thus you, as sole purchaser, fall below the standard rate SDLT so zero is payable.
    • digitalguy
    • By digitalguy 8th Sep 17, 1:46 PM
    • 3 Posts
    • 0 Thanks
    digitalguy
    • #7
    • 8th Sep 17, 1:46 PM
    • #7
    • 8th Sep 17, 1:46 PM
    Thanks all for the replies - thats really helpful.
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