Am I a FTB who does not have to pay stamp duty? Advice, please.

halfone

Hello again

I’ve been looking at the rules re. stamp duty and first time buyers. It’s my understanding that if you’ve not owned, part-owned or inherited a house previously, then you don’t have to pay stamp duty on houses £125-250k. But what about if you’ve part-inherited, selling the property on? I can’t seem to find any guidance on that…

I’ve never owned a house myself (I'm just in the process of looking for my first own place).

Two other family members and myself were the beneficiaries of my late uncle’s estate three(ish) years ago (as his only relatives). Everything was divided amongst us - equally three ways. He had a small amount of savings, but his main asset was his house. We spent nearly a year sorting through everything and clearing it out (he was a major hoarder, and lived an hour and a half away, so it was a lengthy process…), then sold it and split the amount three ways.

Does this disqualify me from the stamp duty exemption? Currently, I’m looking at houses £125k-£145k but I might be more inclined towards the lower end of that bracket if I’m not going to be classed as a FTB with regards to Stamp Duty.

I found this in an HMRC document:

Q7. Can I get relief if I have previously owned an inherited property?
A. No. In this case a person will previously have acquired a major interest in a residential property.

But I’m not sure what the definition of ‘major interest’ is - would that be 50%? In which case I should be okay…

Can anyone clarify the rules on this?

Many thanks in advance.

PS Sorry if I’ve waffled a bit; I wanted to try and include everything that might be relevant.

googler

The only people who can 'clarify the rules' are the HMRC. Why not call or e-mail them to ask?

My view is that you couldn't have sold the property unless the title to it had passed to you and the others from the estate. Your solicitor may have a different view, but it sounds like the estate was distributed to three beneficiaries (at this point you acquired a major interest in the property), who then sold it at a later date.

somethingcorporate

Seek clarification from HMRC..

I agree with Googler - you owned a third of a property which I would consider a major interest. I very much doubt it would be 50%+ because then a couple owning 80% of a SO house would only own ~40% each - under your example of "major" neither of these would have had a major interest in a property (which is obviously not right!).

halfone

Thanks googler and somethingcorporate. I was holding off talking to HMRC as I've had experience contacting them with queries at work; not too impressed with their email/phone services. Although once I did get hold of an actual person who would engage with me they were quite helpful so I guess I'll have to bite the bullet...

I have googled 'HMRC' and 'major interest definition' and all I could find was something related to companies which indicated 40%. I feel like I'm grasping at straws a bit though.

Given that I already paid inheritance tax on my uncle's property, and the amount I got from the sale was small compared to the cost of the houses I'm looking at buying now, I was hoping I might qualify for the exemption. Oh well.