Do I need to pay Stamp duty

jackuk_2

Hi I'm not sure if this is the correct forum, please let me know if not.

Thanks to all the information on this site, I have now got an offer from Natwest to remortgage my home having got divorced some years ago, I need to pay my ex-wife her share in the equity and add my new partner to the mortgage (Keeping me on the title) the figures are:

House valuation £385000, ex has agreed to payment of £50,000 and new mortgage with partner is £231,000.

I had assumed that there was no stamp duty to pay for the ex wife, as the 'consideration' with the mortgage with new partner is half new mortgage i.e £115,500, so I thought not duty was payable as below the £125,000.

However, I have been advised that I need to pay Stamp Duty of around £810 as I cannot take into account the divorce settlement being free of Duty because I'm adding a new person to the propert title! Any advice greatly received.

Many thanks

Savvy_Sue

Confused: I thought the buyer paid stamp duty, and that's your ex?

But if your solicitor says stamp duty is due, then I'd guess that's because stamp duty is due!

densol_2

This is an odd scenario and ive tried to look up the answer. I would have thought the payment to ex wife was SDLT free as its part of a divorce settlement ? That just leaves the half mortgage take over by your new partner as the ' consideration ' and as you say below £125k

I presume your solicitor is saying because this is a " linked " transaction the wifes share is added in ? I dont understand why as its free of tax ?

I would ask the solicitor to explain his calculations in detail

https://www.gov.uk/guidance/sdlt-transferring-ownership-of-land-or-property#if-you-marry-enter-into-a-civil-partnership-or-set-up-home-together

jackuk_2

Thanks for the comments, having phoned the IR, it would appear that I have to pay Stamp Duty on the whole transaction, i.e. 50,000 (to ex) and half the mortgage consideration, i.e. £115,500.
I would only be exempt from the Stamp Duty divorce element if I was not adding another name to the deeds!
Looks like a tax bill of £810 (2% of £40,500: total transaction £165,500 less £125,000 being free of stamp duty )
Doesn't see, very fair, as I need 2 incomes to get the mortgage !!!