Buying part of family members home - stamp duty question

Beckyplans

Granny needs to sell her house to release funds (she does not live there - currently empty). 3 parties from the family are interested in buying a part of it. What are the stamp duty implications in this case, I have looked around but cannot find an example like this?
Details
House is valued at 360k
Person 1 pays 100k
Person 2 pays 100k
Person 3 pays 60k
Granny keeps 100k value
All purchases are cash and threre is no mortgage on the property
How is stamp duty worked out? Is it on each persons transaction separately? Eg person 1 has to pay stamp duty on 100k, or is the value of the house looked at.
Obviously we are keen to minimise our tax bill for this purchase. I'd be grateful for any advice!
Thanks

Bluebirdman_of_Alcathays

Do any of the three other purchasers own other property?

Pixie5740

Would it be more tax efficient for the 3 family members to loan granny the money and then each put a charge on the property therefore avoiding SDLT and CGT altogether and possibly IHT further down the line?

Edit: That's CGT for the 3 family members. Granny might have CGT when she disposes of all or part of the property since it's not her main place of residence.

Pixie5740

Alternative granny could just sell the place on the open market to achieve the best possible price since she doesn't live there anyway.

Beckyplans

Thank you for your replies...
... Yes we all have our own property we live in. We know that this will add 3% to each persons stamp duty bill.

xylophone

If your grandmother does not live in the house and it is standing empty, why does she not simply sell it rather than keeping a share in it?

Or is the plan that the house will be let out in the future?

Had you considered lending your grandmother the money against a charge on the house?

She could then let out the house and pay you interest from the rent, or you could agree interest rolled up and paid on sale etc.

You and your grandmother should take professional advice.

HappyMJ

Beckyplans wrote: »

Thank you for your replies...
... Yes we all have our own property we live in. We know that this will add 3% to each persons stamp duty bill.

Then don't do it the way you're suggesting...it's a waste of money.

There are other ways to get money into her hands without having to sell the property if she doesn't want to sell on the open market....although that would be my recommended course of action.

booksurr

re the SDLT: as each person is paying more than £40,000 for the share, and as each already owns a property, then each person will pay the higher rate SDLT on the "chargeable consideration" given, ie. on the amount they pay in cash, not on the value of the property

I to echo the above posts however, if granny needs cash and you are trying to engineer a DIY equity release then it is madness to do it that way. Each of you will voluntarily pay tax you don't need to plus you will each be exposed to CGT when it is finally sold, so will be taxed again.

who gets the property in granny's will?
if it is split between the 3 of you then why pay tax on it now and in the future when you sell, much easier to loan her the money, put a charge on the property and get the money back when she dies and her estate has to pay back the loans. Yes that means you won't get a share of any increase in property value, but that is why you need to sort out who gets what in her will. Since if it is coming to you anyway that is how you will get your hands on the increased value.

note - if granny is in a care home now or in the future take professional advice on how to protect any money you lend her