Stamp Duty - Urgent!

GhostDog_2

Help!
Completed today and our solicitor didn't know if we would need to pay stamp duty or not
We were originally told we didn't have to worry about it - our share of the property is £84k. Total value of property = £140k
Solicitor speaking to IR this afternoon....:eek:

Anyone any experience / knowledge of this pleeeeeease?

Bargain_Rzl

Are you in a "disadvantaged area" where property is exempt from stamp duty up to the value of £150k?

If you are NOT in such an area, you definitely have to pay stamp duty although you can opt whether to do so on the full market value of the property (thus avoiding any further SDLT on future staircasing) or just on the share you are buying (meaning SDLT will be payable whenever you staircase in future).

If you ARE in such an area... well, watch this space. I completed in November on my SO flat with full market value of £145k (my share is £58k) in a disadvantaged area. My solicitor has told me categorically that I don't have to pay it. I even queried this quoting various detailed legal reasons why I thought I did have to pay it. He still told me I did not have to pay it. I didn't believe him 100% so kept the money on one side anyway. Since he submitted my stamp duty form, HMR&C have written back to him (and to me) saying I do have to pay it. My solicitor maintains that I don't, and has responded to HMR&C. I am waiting to see what happens next and will let you know!

Bargain_Rzl

BTW I should clarify - being in a disadvantaged area doesn't I think affect any of the detail, it's just that with your house being worth £140k in total you will definitely have to pay stamp duty on SOMETHING unless you're in a disadvantaged area. As it's calculated on the full value of the property which in your case is above the £125k threshold.

The confusion when BELOW the threshold for your area arises because there is a legal clause somewhere which brings the rent portion into the equation. As I say, I have yet to get a final answer on this myself.

GhostDog_2

Ok so this is really but because I didn't think I had to worry about it I didn't listen when someone mentioned the percentage.....

Is it 3%?

Bargain_Rzl

Oh no, it's only 1%!

lynzpower

Are you in a "disadvantaged area" where property is exempt from stamp duty up to the value of £150k?

If you are NOT in such an area, you definitely have to pay stamp duty although you can opt whether to do so on the full market value of the property (thus avoiding any further SDLT on future staircasing) or just on the share you are buying (meaning SDLT will be payable whenever you staircase in future).

I know you and I have chatted this over before RZL, and I was wrong in what I thought.

I thought that if the rental proportion exceeds ( basically) peppercorn, then it does apply

I bought in a SDLT exempt area, but in saying that the full cost of my purchase was over 150 for the whole flat

What was the doc you posted up, can you remember?

Bargain_Rzl

Sorry Lynz, I can't remember the clause or where I got it from, but this was how I worded it when I queried it the first time with my solicitor:

Paragraph 3.1 <of the property report>, Stamp Duty Land Tax, states that the property is in a designated disadvantaged area and the full market value does not exceed £150,000, therefore no stamp duty is payable. I have seen legislation quoted which led me to understand that in a shared-ownership transaction, if the annual rent exceeded £600pa then stamp duty was payable on the full value of the property regardless of whether the total property value fell beneath the stamp duty threshold. However, I have received no advice directly relating to a property of total value <£150k in a disadvantaged area. Could you please seek additional confirmation from *****?

lynzpower

and did your sol get a response - or is that what you are waiting for with your money in the bank ?

Bargain_Rzl

That's what I'm waiting for... when I got the bill from HMR&C I got onto my solicitor the next day. His conveyancer had also received notice that SDLT was due and had "dealt with it". I've heard nothing since - the conveyancer is a lady of few words (!) and I've had nothing more in the post from HMR&C. As I said, watch this space...

(edit: chased it up by email today but no response as yet.)

Bargain_Rzl

As I said to the OP, the one thing I am absolutely certain of is that if the property is valued at >£125k in total in an ordinary area or >£150k in total in a disadvantaged area, SDLT is payable regardless of how low the value of the purchased share might be.

lynzpower

Bargain_Rzl wrote:

As I said to the OP, the one thing I am absolutely certain of is that if the property is valued at >£125k in total in an ordinary area or >£150k in total in a disadvantaged area, SDLT is payable regardless of how low the value of the purchased share might be.

Yes, this was the bit where you qwere right and I was wrong.

My thoughts were that it was the 600pa rental part that pushed whether it was payable or not, but its the value in what area that does ( as you say)

Ghostdog - tell us! is it in a disadvantaged area or not

i have everything crossed for you it is!!!