Stamp duty implications

donerkebab

We are part exchanging my parents house with a new build (in my name)- the builders have agreed to pay 2% of the stamp duty as one of the incentives.

Just about to exchange contracts then their solicitor queries the stampduty implications. Why should it matter whose name deeds new build is in? Also we clearly stated this to builders and all forms via my solicitor since the start why raised this a week before exchange?? :mad: Has anyone else had this problem before?

Richard_Webster

You need to explain a bit more how the stamp duty implications have been queried.

donerkebab

OK part exchanging parent's property (deeds in their names) on new build (which will be in my name) - one of the incentives for 2% of the 3% stamp duty to be paid by the builder.

My solicitor now tells me 6 weeks after filling all buyers/sellers forms/ informing builders at start of the above etc - that the builder's solicitor is raising the name difference in deed to be a stamp duty implication - I don't know the actual implication/problem am waiting for builders to clarify with thier solicitors as it seems to take a whole week to get a reply/response back.

Graham1979

Don't developers have an exemption on paying stamp duty for a property that they receive in part-ex?

If the name on the deeds of the property they are receiving in part-ex doesn't match to the name of a customer who bought a new build from them then could they be liable to pay stamp duty on your parents property taken in part-ex?

Doozergirl

Graham1979 wrote: »

Don't developers have an exemption on paying stamp duty for a property that they receive in part-ex?

If the name on the deeds of the property they are receiving in part-ex doesn't match to the name of a customer who bought a new build from them then could they be liable to pay stamp duty on your parents property taken in part-ex?

Yes they do, if their intention is to sell the property directly on.

That's what would make sense to me. It may not technically work as a part-exchange in the eyes of HMRC if the names are different on the deeds - but the Stamp Duty paid incentive shouldn't be affected as it's the SDLT on your parent's current house that would be the issue. You might just have to renegotiate that they're paying the Stamp Duty on your parent's place as well if it really doesn't count as a part-ex

donerkebab

Doozergirl wrote: »

Yes they do, if their intention is to sell the property directly on.

That's what would make sense to me. It may not technically work as a part-exchange in the eyes of HMRC if the names are different on the deeds - but the Stamp Duty paid incentive shouldn't be affected as it's the SDLT on your parent's current house that would be the issue. You might just have to renegotiate that they're paying the Stamp Duty on your parent's place as well if it really doesn't count as a part-ex

Thanks Yes believe this is the problem - however if they speeded up wouldn't the 1% stamp duty be excempt anyway before the 1/1/2010.

Doozergirl

donerkebab wrote: »

Thanks Yes believe this is the problem - however if they speeded up wouldn't the 1% stamp duty be excempt anyway before the 1/1/2010.

Good point; we didn't know the purchase price.

Are they planning to complete before the end of the year? SDLT is payable on completion and lots of solicitors are shutting doors on Tuesday until the new year.

donerkebab

Sorry that makes sense now - stamp duty payable on completion - not completing until new build complete in Spring - exchange was meant to be next week. I will fight the case they waiver the 1% as well because I told them right at start the situation.... still think we are overpaying on the new build but thats a different thread :money:

Doozergirl

donerkebab wrote: »

Sorry that makes sense now - stamp duty payable on completion - not completing until new build complete in Spring - exchange was meant to be next week. I will fight the case they waiver the 1% as well because I told them right at start the situation.... still think we are overpaying on the new build but thats a different thread :money:

If you told them that is what was happening from the start then I agree that is their own problem to deal with!