Stamp Duty liability

rarnold

Hi guys,

A bit of background...
So we're in the process of buying a flat from my grandparents. It's been valued by the mortgage lender as £170k but we're paying £100k for it (the 70k being left as equity in the property by my grandparents as a gift-very generous I know!).

Anyway. When we approached our solicitors we gave them all of this information, and were told that no stamp duty was payable as we were only paying 100k for the flat (have this in emails etc).

We've just got the Stamp Duty return form through from our solicitors and it's saying we're liable for £1700 stamp duty. Is this correct? I'm cross that our solicitor has said we didn't have to pay anything and has now changed his mind at this stage!

Any advice is greatly appreciated!!

googler

Read the Stamp Duty pages at the HMRC website?

xylophone

http://www.guardian.co.uk/money/2012/nov/07/house-sold-less-than-stamp-duty-threshold

"It's the actual amount paid for a property that determines whether SDLT is payable (and at which rate), not the market value."

http://www.hmrc.gov.uk/sdlt/intro/rates-thresholds.htm

The "gift" from your grandparents may have IHT implications. http://www.hmrc.gov.uk/inheritancetax/pass-money-property/exempt-gifts.htm

And unless the flat is their principal private residence, possible CGT implications?http://www.hmrc.gov.uk/cgt/intro/basics.htm

martinsurrey

xylophone wrote: »

http://www.guardian.co.uk/money/2012/nov/07/house-sold-less-than-stamp-duty-threshold

"It's the actual amount paid for a property that determines whether SDLT is payable (and at which rate), not the market value."

http://www.hmrc.gov.uk/sdlt/intro/rates-thresholds.htm

The "gift" from your grandparents may have IHT implications. http://www.hmrc.gov.uk/inheritancetax/pass-money-property/exempt-gifts.htm

And unless the flat is their principal private residence, possible CGT implications?http://www.hmrc.gov.uk/cgt/intro/basics.htm

^ agree

challenge your solicitor on this and ask for thier workings and the part of the tax code they used.

drop things like "chargable consideration" in and send them a link to

http://www.hmrc.gov.uk/sdlt/calculate/transfer-ownership.htm#4

"
Property given as a gift

If the property is received as a gift there's no SDLT to pay, so long as there's no outstanding mortgage on it. But if the person who receives the gift takes over some or all of an existing mortgage, then SDLT may be payable if the value of the mortgage is over the SDLT threshold
"

and

http://www.hmrc.gov.uk/sdlt/calculate/value.htm#1

"
Anything of economic value which is given in exchange for land or property counts towards the chargeable consideration.
"

if they dont back down, think about getting another solicitor and complaining about them.