SDLT £40 000 threshold

Lily_

Hi there,
I would very much appreciate advice and opinion on the following:

I'm about to purchase my first home in the UK for £120 000. I own 30% of a house and 50% of a flat in another European country. Does anyone know how the £40 000 Stamp duty threshold works: Does the combined value of my shares need to be less than £40 000 or is it £40 000 for each share?

My solicitor couldn't respond to my query and referred me to the government inland revenue website. I phoned them and they said that they don't have any guidance on the matter and told me to send my enquiry by post....

Any advice will be highly appreciated,
Lily

kingstreet

It's in total, not per property.

alan0356

My understanding is that SDLT relates to purchase price of house - any property under £40,000 not subject to SDLT if other properties owned.

The main concern ( and you would have to clarify with solicitor or HMRC ) is that if you already own 2 other properties ( even if abroad ) you may be liable to 3% stamp duty on new property purchase price of £120.000 ie £ 3,600.

I am a mortgage broker and this reply is for information only

booksurr

alan0356 wrote: »

My understanding is that SDLT relates to purchase price of house - any property under £40,000 not subject to SDLT if other properties owned.

The main concern ( and you would have to clarify with solicitor or HMRC ) is that if you already own 2 other properties ( even if abroad ) you may be liable to 3% stamp duty on new property purchase price of £120.000 ie £ 3,600.

I am a mortgage broker and this reply is for information only

that reply totally misses the point of the question. OP would be liable for higher rate only if their ownership of the other properties represents a "major interest" - which is defined as a share worth more than £40,000. This is Condition C

kingstreet wrote: »

It's in total, not per property.

No it isn't, the £40,000 limit applies to EACH PROPERTY INDIVIDUALLY . It is not the total of shares of multiple properties

this is categorically stated at 3.11 in the HMRC guide. Do appreciate that HMRC call centre staff can only deal with very simple questions and do not have the time to look up answers and read guides that they are unfamiliar with

"3.11 Each dwelling owned at the end of the day should be looked at separately for the £40,000 condition, several interests below this value which add up to more than £40,000 will not cause Condition C to be met."

if, as implied by OP, 30% of house A is <£40,000 and 50% of the flat is also <40,000 (treated individually), then OP is not liable for the higher rate

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

kingstreet

Thanks, booksurr.

I'm guilty of not updating myself since the last question on this subject before the consultation ended.