Higher rate stamp duty

Capricorn43

Hi
I wonder if anyone is able to offer some advice re the higher rate stamp duty. My house is currently on the market. The plan is to pool resources with my fianc! who has recently inherited 50% share of his parents home and buy a home together. Our estate agent has advised that as my fianc! is still listed on a mortgage with his ex wife, we will be liable to the higher stamp duty charge as he will be classed as having two homes. Points to note are:

1. His consent order states that he relinquished all rights to the marital home and received or will receive no equity from it.

2. He is still on the mortgage as the bank will not allow his ex wife to take over the mortgage due to low salary. She does however have another man living with her and has done for two years but refuses to add him to,the mortgage to release my fianc!.

3. My fianc! is listed on the electoral register as living at my address for the past three years.

Surely his main residence is my house and therefore if I sell and buy a new home with him, we won't have to pay the higher rate? Any help,would be much appreciated.

Thank you

theartfullodger

I'm not very bright:. On what basis does he not own more than 1 property, please?

Bluebirdman_of_Alcathays

Capricorn43

To theartfullodger ... He has no stake in his previous marital home according to the consent order. He handed over all equity to his ex wife and will not get a lump sum when the mortgage is paid off. Bank will not remove his name from the mortgage so effectively isn't he just guarantor for his ex wife?

scottishblondie

The mortgage situation doesn't matter. If his name is on the deed of any property then he is considered to own it (regardless of the agreement resulting from his divorce), and is liable for the 3% surcharge when buying another property.

Capricorn43

Ah, so if his name is on mortgage it will still be on the deeds? Not good. It appears that his ex is in breach of the consent order in not using best endeavours to get his name off the mortgage even though she is cohabiting with another man. Guess it's another conversation with the solicitor then. I will post on another forum page to see what can legally be done about that situation.
Only solution is to put new house in my sole name....

AdrianC

He currently owns one property. He will own two at the end of this deal.
He does not own his current primary residence, so he cannot be replacing it.

He's due to pay the SDLT increase. It's a no-brainer.

While he's still on the LR/mortgage for the ex's property, he's still liable for the full debt. I presume she can't get a mortgage for it in her own name?

AnotherJoe

Thought experiment for the experts here.

Fiance buys a percentage of the OPs house. Lets say a £35k stake.
It is a second house, but under £40k, so no extra SDLT.

OP and fiance then sell their joint main residence and buy another.

No SDLT due.

???

Capricorn43

AnotherJoe .... apologies, but OP ... is that me???

AnotherJoe

Yep. Original Poster.

booksurr

AnotherJoe wrote: »

Fianc!e buys a percentage of the OPs house. Lets say a £35k stake.
It is a second house, but under £40k, so no extra SDLT.

not how I understand it

3.42 Where a transaction is entered into by joint purchasers the higher rates will apply
if the transaction would be a higher rate transaction for any of the purchasers
considered individually. So if there are two individual purchasers and
Conditions A to D are all met for one of them only, the transaction will be
charged at the higher rates.

3.43 This rules applies whether an interest in a dwelling is purchased as joint tenants
or tenants in common. It does not matter how small the interest of a particular
purchaser is, the test is applied in the same manner.

AnotherJoe wrote: »

OP and fiancee then sell their joint main residence and buy another.

No SDLT due.

agreed, but subject to the replacement rule regarding timing of the transactions, they would not be liable for higher rate on the new place as it would be a replacement main home.