Stamp duty on simultaneous staircasing and resale (shared ownership)

alisonken

I'm in the ridiculous situation of the HMRC helpline, my solicitor AND our HA not knowing what to do about this - PLEASE HELP!

What we're trying to find out is if we have to pay stamp duty on the staircasing to 100% which is taking place simultaneously with our buyer completing the purchase of all of our property.

We own 50% of our flat under shared ownership, the HA own the other 50%. All along we've been told that we'll do 'simultaneous staircasing and resale' so that our buyer buys 100% from us. The HA has issued a memorandum of staircasing in our name, to our solicitor asking for the premium of 50% of the full sale price. But the funds for this are from our buyer, not from us.

HMRC helpline say they can't advise as it's complex, even though loads of these transactions must happen every day in the UK!! Since we're not the final recipients of the property, I don't think we should be paying stamp duty - does anyone have any informed opinions, or experience of this who could advise?

Thanks in advance!

davidmcn

Not sure of the current rules (might have changed with the latest load of SDLT amendments) but what you're looking for is "subsale relief".

alisonken

Thanks - have tried that route and solicitor is saying that subsale does not apply to a memorandum (of staircasing). Really hitting a block with this one, don't understand why there is no easily accessible answer, must happen all the time!

AdrianC

So you're buying the other 50%, then selling 100% to the buyer?

Rather than him buying 50% from you and 50% from the HA?

urbanmyth

We had to pay the stamp duty for staircasing up to 100% because we technically owned 100% of the property for a whole minute during the simultaneous sale. Our buyer then paid stamp duty on the entire purchase.

booksurr

urbanmyth wrote: »

We had to pay the stamp duty for staircasing up to 100% because we technically owned 100% of the property for a whole minute during the simultaneous sale. Our buyer then paid stamp duty on the entire purchase.

depends on which of the 2 options outlined by Adrian C above applies to the OP given that the OP's solicitor has already refused the sub sale relief route

alisonken

Thanks urbanmyth - helpful to know, if not exactly saving us any money! Do you mind telling me when this was, and if you were given any particular information/arguments at the time?

We've been told that it isn't possible for the buyer to buy 50% from us and 50% from them simultaneously due to new rules (though this was presented to us as the case at the outset of us trying to sell, so this is turning into £2k we weren't expecting to pay). Our solicitor is saying that subsale relief doesn't apply to simultaneous staircasing and resale, but doesn't seem willing to tell us why. Her opinions seem to have come exclusively come from all the places we've looked, though, rather than any knowledge of the law - she started off telling us she had no idea and has had to investigate from scratch (including with the "Inland Revenue", apparently). We've now agreed to pay up whilst getting a written opinion from HMRC; if it's in our favour we can then claim a refund.

I just can't believe there isn't information on this though. It's a sufficiently different (but common) kind of transaction to warrant being pointed out in HMRC guidance e.g. 'by the way everybody, this applies even if you're staircasing solely to resell within one minute'

jamie_james

Hi There AlisonKen

We are in the same position (although no offers as yet!) - did you find an answer to the question?
Would really appreciate any info that you have.
Thanks!

aries11w

My solicitor seems very adamant that when staircasing to 100% whilst simultaneously selling, you are liable for the stamp duty of the 100% staircase.

AMILLIONDOLLARS

aries11w wrote: »

My solicitor seems very adamant that when staircasing to 100% whilst simultaneously selling, you are liable for the stamp duty of the 100% staircase.

Surely if you already own 50% (stamp duty already paid on this half), you should only pay 50% on the other half. Then the purchasers would pay 100% on the whole amount, as a new transaction.

This would be the sensible route to take!

AMD

aries11w

This would indeed be the most sensible, unfortunately this isn't the case

We are paying £2,000 stamp duty for the pleasure of selling 100% on the same day.

Apparently stamp duty is only liable when you own 80% of above.