Stamp Duty Surcharge

thornberry_2

I own my home mortgage-free. It is up to for sale but no offers yet.

Last week, I had an offer accepted on a property which I want to move into. It would be my main and ultimately my only home, but I could be in a position of paying 3% extra stamp duty. While I could reclaim, I dont have those funds available.

Could I transfer my existing property into my fathers name (he lives with me and has no other property), complete my purchase and sell my old home without the additional SDLT on my new property or SDLT on the transfer?

booksurr

ask your solicitor - that is what you pay them for after all: professional advice

or if you are too afraid the answer may not be what you want to hear, read the guide yourself?

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/509184/GuidanceNote_Final.pdf

thornberry_2

first thing I read but didnt find an answer

davidmcn

Your purchaser (or rather, your father's purchaser) will be concerned about a recent transfer of title - mortgage lenders don't like transactions where the seller has owned for less than six months, and there's the risk of a gratuitous alienation being challenged by your creditors if it turned out you had been insolvent at the time (you'll know that you're not, but somebody else will be looking for more evidence and/or insurance).

TBagpuss

How much is the tax likely to be? Have you looked into borrowing it? The cost of doing so may well be less than the costs involved in transferring the property.

AdrianC

In transferring the property into your father's name, you'd be making him a gift of the value of it.

If he then sold it, and gifted you the money back, that would count as him depriving himself of assets if he needed residential care, and it would count as part of his estate for IHT purposes.

If you're so tightly strapped on buying this property, why not sell the old one and link the two as a chain, like a very large percentage of house transactions?

sheramber

from the link above

Individuals – purchase of a single dwelling – Condition D

3.16 Condition D is that the purchased dwelling is not a replacement of the
purchaser’s only or main residence19
.

3.20 There is a replacement of a main residence if, in the three years ending with the
purchase, the purchaser disposed of a major interest in another dwelling24 and
that other dwelling was, at some time in the three year period, the only or main
residence of the purchaser25
.
3.21 There is also a replacement of a main residence if in the three years ending with
the purchase, the purchaser’s spouse or civil partner disposed of a major interest
in another dwelling and that other dwelling was, at some time in the three year
period, the only or main residence of the purchaser.

Pixie5740

In an attempt to avoid paying the additional SDLT, could the OP's father be landed with a substantial CGT bill further down the line?

booksurr

thornberry wrote: »

Could I transfer my existing property into my fathers name (he lives with me and has no other property),

in principle SDLT is based on chargeable consideration so yes you could change the ownership and avoid the higher rate since your current place is mortgage free and would "merely" need to have the ownership transferred as a gift (so zero chargeable consideration)

as others have pointed out however, there are other implications besides you avoiding what should only be a short time period cash flow problem before you get the refund back

Pixie5740 wrote: »

In an attempt to avoid paying the additional SDLT, could the OP's father be landed with a substantial CGT bill further down the line?

unlikely given it appears it would become father's main residence - of course in the longer term he would have to remain resident whilst owning it