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Stamp Duty Calculator and Q&A discussion

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Comments

  • VikW
    VikW Posts: 3 Newbie
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    Hi Everyone, hoping someone can help.

    I bought a house for my Mum 7 years ago (cash buyer, no outstanding mortgage), I have never lived in the property. My Mum lives in the property and will continue to live in the property.

    I am now in the process of buying a second house, but want to avoid the increased 10,000 stamp duty payment that would be required and wondered:

    1. Is it possible to transfer the house over to my Mum to avoid the additional 7,500 payment
    2. How long would something like this take via?
    3. Is it legal?

    Any help or guidance would be appreciated, struggling to find any concrete information!

    Thanks
  • 00ec25
    00ec25 Posts: 9,123 Forumite
    Combo Breaker First Post
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    VikW wrote: »
    Hi Everyone, hoping someone can help.

    I bought a house for my Mum 7 years ago (cash buyer, no outstanding mortgage), I have never lived in the property. My Mum lives in the property and will continue to live in the property.

    I am now in the process of buying a second house, but want to avoid the increased 10,000 stamp duty payment that would be required and wondered:

    1. Is it possible to transfer the house over to my Mum to avoid the additional 7,500 payment
    2. How long would something like this take via?
    3. Is it legal?

    Any help or guidance would be appreciated, struggling to find any concrete information!

    Thanks
    pay a profession solicitor to do it for you otherwise you will get a VERY BIG TAX BILL

    you have owned a property for > 7 years that you have never lived in.
    If you gift, sell or otherwise "dispose" of the property to your mother you (not mother) will be liable for Capital Gains tax unless you can "create" (retrospective) paperwork that proves you have never had a beneficial interest in the property you are disposing of.

    yes you can give it to mother and if done so before completing the purchase of your own home it would be perfectly legal way to avoid the higher rate SDLT, but the CGT bill may be somewhat larger than the extra SDLT depending on the numbers of course

    no one can say how long it will take because we don't know your circumstances and what else you need to do
  • SDLT_Geek
    SDLT_Geek Posts: 2,528 Forumite
    First Anniversary First Post Name Dropper
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    VikW wrote: »
    I bought a house for my Mum 7 years ago (cash buyer, no outstanding mortgage), I have never lived in the property. My Mum lives in the property and will continue to live in the property.

    I am now in the process of buying a second house, but want to avoid the increased 10,000 stamp duty payment that would be required and wondered:

    1. Is it possible to transfer the house over to my Mum to avoid the additional 7,500 payment
    2. How long would something like this take via?
    3. Is it legal?
    It is unlikely to be sensible to completely give away a valuable asset to save about £7,500. Although in a narrow SDLT sense it would work, it is likely to cause other problems. As the gift is to a connected person it will be deemed to be a disposal at market value and as you have never lived in the property you can expect to pay capital gains tax.

    Where have you been living for the last three years? If in rented or with family then there might not be an angle. But if for at least part of the period you lived in a home which you or a spouse owned and which has been sold, then you might be able to rely on the replacement exception. See SDLTM09800.
  • VikW
    VikW Posts: 3 Newbie
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    Thank you, this is very helpful. The property has increased approximately £20,000 since purchase. Is this the figure used to calculate CGT?

    I do have an appointment with a solicitor next week to go through the details but didn't want to go in not having a clue.

    I have never lived at the property, currently renting with my partner, however, the property is my registered address and has been since I purchased it.

    I realise now that I have made some serious mistakes in an attempt to avoid Inheritance Tax further down the line, which in hindsight would not have applied anyway due to the the price of the house and my Mums overall estate. You live and learn.
  • VikW
    VikW Posts: 3 Newbie
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    I have been living in rented since 2013, however, my Mums address has been listed as my main address since it was purchased.

    I totally agree that to give away a house to save 7,500 seems crazy. However, in my current situation, 7,500 is the difference between being able to move from my current rented accommodation and not.

    Thanks so much for your reply, I really appreciate it.
  • mbugsy18
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    Hi, this is a query about stamp duty on a replacement main dwelling.
    I have found a house but the stamp duty is horrendous using the calculator so I will be selling my current residence and will be moving to this house if the offer is accepted. I am a second home house buyer as I have a rental property. I would like to know if I can reclaim or reduce my stamp duty as I am buying to live i this house. I have read an earlier post about SDLTM09800 but the examples have me puzzled as to when I need to sell my current house, it’s not yet on the market.
  • AnotherJoe
    AnotherJoe Posts: 19,622 Forumite
    First Anniversary Name Dropper First Post Photogenic
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    mbugsy18 wrote: »
    Hi, this is a query about stamp duty on a replacement main dwelling.
    I have found a house but the stamp duty is horrendous using the calculator so I will be selling my current residence and will be moving to this house if the offer is accepted. I am a second home house buyer as I have a rental property. I would like to know if I can reclaim or reduce my stamp duty as I am buying to live i this house. I have read an earlier post about SDLTM09800 but the examples have me puzzled as to when I need to sell my current house, it’s not yet on the market.


    If you sell your main residence and buy another to live in then you pay standard SDLT only (assuming you are in England/Wales). It doesn't matter if you also have other property.

    If you do this by buying the new residence first and then some time later selling the old one, that some time later needs to be within 3 years, you will initially have to pay the extra (additional) 3% SDLT and then can get it back (subject to 3 years rule) when you sell your original residence.

    Is this your situation?
    Eg you live in A, own B as well, are selling A to buy C to live in?
  • mbugsy18
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    AnotherJoe wrote: »
    If you sell your main residence and buy another to live in then you pay standard SDLT only (assuming you are in England/Wales). It doesn't matter if you also have other property.

    If you do this by buying the new residence first and then some time later selling the old one, that some time later needs to be within 3 years, you will initially have to pay the extra (additional) 3% SDLT and then can get it back (subject to 3 years rule) when you sell your original residence.

    Is this your situation?
    Eg you live in A, own B as well, are selling A to buy C to live in?

    Yes in London. So will a solicitor calculate the stamp duty? Does the HMRC calculator address the 3% surcharge or not? It has given me a calculation based on the purchase price I put in and ticked it will be my main residence. Thanks for your quick reply.
  • AnotherJoe
    AnotherJoe Posts: 19,622 Forumite
    First Anniversary Name Dropper First Post Photogenic
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    mbugsy18 wrote: »
    Yes in London. So will a solicitor calculate the stamp duty? Does the HMRC calculator address the 3% surcharge or not? It has given me a calculation based on the purchase price I put in and ticked it will be my main residence. Thanks for your quick reply.

    Yes your solicitor will calculate it and yes the HMRC calculator addresses the 3% surcharge correctly as long as you put the right info in.
    What is the purchase price of the property you are looking to buy ?
  • mbugsy18
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    The purchase price is £800K.
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