Stamp Duty - Other options?

niallmacmillan

We are looking to buy my Mother in laws house (family home).

It was valued last year at 300k but after online and local research I would say more realistically 270K.

The house was mortgage free. The idea was eventually the property would be sold and split 3 ways for inheritance to my partner and my sister in law.

The mother in law withdraw 70k of equity on the property 16 months ago and bought another property that she now lives in.

The family home is now being lived in by my sister in law (who eventually will inhert, she pays rent to the MIL which pays for the 70k outstanding.

The idea was the house would now eventually be split like this

If valued at 270k

My partner -100k
Sister in law - 100k
Mother in law 70k

The MIL suggested an idea that my partner & I buy the house and use the 100k equity as our deposit for 170k mortgage, give 100k to the sister and 70k to the MIL so we can buy the house outright.

This gives the sister 100k to have a deposit and to get on the property market. (Sister has no interest of buying the family home)

Then the mother 70k to pay of her mortgage

We have to pay £8k+ for stamp duty if we buy the house.

Is there anyway of not paying that or the mother in law to transfer the house over to us to avoid this or maybe something else??

Can the MIL value the property at 249.999 and if so how much of an effect will this have.

From researching online, there is now way we can do this. I thought I would ask you though just to confirm.

Any help regarding this??

betmunch

Mother in law can sell for what she wants, if its worth £270k but she sells for £250K thats her business.

If it is truely worth £270k then she can sell it at £250K and you reduce your equity share to £80k of the purchase price and avoid the extra stamp duty.

Sorted!

Wh05apk

Don't think it's quite that simple, if the sale is scrutnised b HMRC and they feel the price was artificially low to avoid stamp duty they will treat it as tax evasion.

If the property was sold on the open market genuinely but only sold for £150k there would be no issue, but as a family transaction it would be seen as an undervalue transaction, and treated as such for tax.

Yorkie1

Full discussion of the issues is already ongoing on the House Buying board ...

https://forums.moneysavingexpert.com/discussion/4174449

and at least one other thread.

OP, please stop posting duplicate threads.