Stamp duty on transfer to wife of 10% interest in property??

Thrugelmir

Thywillbedone wrote: »

I have read this several times but as no worked example includes a less than 50% transfer of ownership it is not helping me - or are you saying that my wife IS actually taking responsibility for 50% of the mortgage in law by being a joint applicant on the mortgage notwithstanding she will not be paying any part of the mortgage going forward (which I could prove to HMRC in a declaration of trust/some other deed)?

The mortgage is a joint and several liability that's the important legal factor. The HMRC will simply say that what you propose is avoidance. Don't you think that this has been tried and tested previously? No exactly a new piece of legislation. So will be case law in place that the HMRC will use to refute your application. Legal battle will be an expensive option.

Thywillbedone

Thrugelmir wrote: »

The mortgage is a joint and several liability that's the important legal factor. The HMRC will simply say that what you propose is avoidance. Don't you think that this has been tried and tested previously? No exactly a new piece of legislation. So will be case law in place that the HMRC will use to refute your application. Legal battle will be an expensive option.

Point taken. Although the legislation may not be new I have not found the answer to my specific query in black and white anywhere following 3-4 hours of searching solicitors briefing notes, taxation forums etc etc! Not having had many dealings with HMRC I thought, perhaps naively, it would be possible to reason with them and they could see what was being put in place would not alter the financials between my wife and I.

TrickyDicky101

I think you have raised a very interesting question - my own personal belief (and it is just that) is that the issue of joint & several responsibility for the mortgage debt is a red herring.

I believe the chargeable consideration your wife would be 'paying' would be 10% of the outstanding mortgage debt (ie £47.5k) and thus under the SDLT threshold therefore nothing to pay.

However, I would hate to get it wrong and have HMRC fine you and charge interest for tax evasion and unpaid tax at some later point.

Thywillbedone

TrickyDicky101 wrote: »

I think you have raised a very interesting question - my own personal belief (and it is just that) is that the issue of joint & several responsibility for the mortgage debt is a red herring.

I believe the chargeable consideration your wife would be 'paying' would be 10% of the outstanding mortgage debt (ie £47.5k) and thus under the SDLT threshold therefore nothing to pay.

However, I would hate to get it wrong and have HMRC fine you and charge interest for tax evasion and unpaid tax at some later point.

Thanks. I am stumped why HMRC guidance is so poor on this point. I did speak with their SDLT helpline by the way but I have seen many posts on various forums suggesting the 'advice' given by their helpdesks is not always accurate!