Adding spouse on remortgage: stamp duty payable?

stampdutynovice

We are currently in the process of remortgaging our home and have received an offer in our joint names. The current mortgage and deeds are in my husband's sole name but we now wish to have both of these in joint names. We've read many differing opinions as to our potential liability for stamp duty land tax. Can anyone give me the latest position?

It seems unfair that we might have to pay SDLT when effectively nothing is changing between us and I contributed half to the original purchase and half of the ongoing costs. We were married before we bought the property.

If there is likely to be a SDLT liability in this scenario, is it possible to have a joint mortgage but sole name on the deeds?

Trillionaire

The way I've always understood it is that you only pay stamp duty on purchase - not remortgage.

The simpliest thing would be to ask your solicitor / conveyancer.

CLAPTON

how much is the property worth?

silvercar

If you are married, there is no SDLT payable on transfers between spouses.

Trying_to_be_good

You are likely to need to pay fees to have the deeds transferred to joint names - and should each take independent legal advice, but as silvercar says, no SDLT between spouses unless you're splitting up.

TEDDYRUKSPIN

This has nothing to do with stamp duty tax. None is required.

It will still cost you to add your name on to the deeds. It should actually cost £250 but more and more solicitors are charging £500.

This will depend if your house still has a mortgage too?

(1) if mortgage with sole name. You have a chose. Add your name also as joint borrowers and on the deeds.

(2) keep sole name borrower with lender but add both names on deeds.

You will have to ask the banks anyway for the specific documents.

hebe

I would suggest asking your solicitor or asking the tax office direct. I was added to my husband's mortgage last year and was told that if half of the outstanding mortgage was over the stamp duty threshold, then stamp duty would be payable on the transaction, there is an exemption for divorce but not for adding a partner onto an existing mortgage..

See here: http://www.hmrc.gov.uk/so/marriage.htm

stampdutynovice

Thank you all very belatedly for the advice below. This has taken a while to sort out but after conflicting advice from various source, the Revenue confirmed that in our situation, i.e. remortgaging and adding a spouse to the deeds at the same time means stamp duty is due on half of the amount of the outstanding mortgage.

Given that the outstanding mortgage was just under £400k, this meant that 50% of this would be over the £175k stamp duty threshold, so I was expected to pay around £2k, despite no money changing hands or changes to our living arrangements, relationship, etc. This just seems like pure greed by the Revenue, as we have already paid stamp duty on the purchase.

We had in fact proceeded with the remortage on the understanding that no SDLT was payable and it was only when I received the completion statement from the solicitors that it became evident that this £2k had in fact been taken from our account!! It amazes me that we were left in the dark as to whether we were liable to pay this amount or not, until the mortgage transaction had actually taken place.

Fortunately I had a Eureka moment and came up with a way around this before the solicitor sent the cheque to the Revenue. By scrapping the joint tenant (50/50) idea and transferring the property into both names as tenants in common in unequal shares, i.e. 60/40, my share in the property fell short of the stamp duty threshold. I'd run this idea by the Revenue over the phone and they explained that the 'consideration' in this case was the act of my taking on half of my husband's mortgage debt!?!? surprisingly they were quite supportive of my suggestion to avoid this payment!!

When I challenged the solicitor who had drawn up the papers to transfer the property into joint names, he advised that we could roll back the whole transaction and get the mortgage company to revise the offer into my husbands sole name.....he had clearly not been watching the news for a while as mortgage tracker rates were creeping up daily and were substantially different from when our initial offer was made.

This was on top of the fact that the solicitors had basically sat on our papers for the best part of a month and only when I called to chase did they tell me that we had some redemption fees to pay on our old mortage - it seems that they had copied someone else's completion statement onto our file!!! - and couldn't proceed until these had been paid. I'm not quite sure when they were planning to update me with this info if I hadn't called myself. So, several months down the line, we are out of pocket in terms of the additional interest we have paid on our mortgage whilst the solicitors sat on their hands and our fixed rate reverted to standard variable, but happily we have saved £2k in stamp duty.