Stamp Duty on 2nd property - Refund?

JasonHappy

I hope I can enroll your help...

Facts:
I am the sole owner my house.
My girlfriend lives with me in my house.
I am selling my house and we are buying a house together.
My girlfriend is listed as an owner of her mum's house as her mum was self employed at the time she was moving and couldn't get a mortgage on her own. They did have a joint mortgage, though my girlfriend never contributed, and now this is solely in her mum's name.

Dilema:
We are around a week away from exchange on our new home and my girlfriend is still on the deeds to her mum's house. It has taken around 5 months of back-and-forth so far to have her removed with the latest instruction that she needs to seek legal advice and they will not let her waive that right. We are seeing a solicitor on Monday.

Questions:
If we complete and pay the additional SDLT, are we entitled to a refund when she is finally removed from the deeds to her mum's house (within 3 years)?

Does anyone have experience of how quickly HMRC make refunds?

I'm concerned most of the HMRC documents talk about replacing your main residence, which the 'disposal' of her mum's house isn't. We can't afford the 2nd home stamp duty and not get it refunded. Help! :money:

kingstreet

If we complete and pay the additional SDLT, are we entitled to a refund when she is finally removed from the deeds to her mum's house (within 3 years)?

Only if the property she jointly owns is her main residence.

If not, there will be no refund so you would need to delay completion until she is removed from the mortgage/ownership.

davidmcn

kingstreet wrote: »

Only if the property she jointly owns is her main residence.

Or rather (I think!), if it had been her main residence at some point during the three years before she sold it (and she hasn't owned a different main residence inbetween).

JasonHappy

Thank you for your replies.

I share your opinion based on my research but my solicitor is positive we would be refunded. When I pushed him to accept liability for any money we couldn't get refunded, his advice was that if I was concerned to call HMRC (which I will do in the morning).

booksurr

for there to be a refund the property being disposed of (after having purchased the new one) must have been the main residence at any time during the 3 years ending with the date of the disposal and the disposal must be completed within 3 years of the date of purchase of the new place

the crucial test therefore is was the girlfriend living with her mother in the property as GF's main residence within that 3 years?
If was she has a case for a refund, if she wasn't she doesn't.

removal from the deeds easily meets the requirement for "disposal" since the guidance is very clear that disposal is of the interest in a property, it does mean the same as the vernacular use of "it was sold"

JasonHappy

booksurr wrote: »

removal from the deeds easily meets the requirement for "disposal" since the guidance is very clear that disposal is of the interest in a property, it does mean the same as the vernacular use of "it was sold"

Does this mean that any reference from HMRC referring to "the sale", "selling" and "sold" does include the transfer of equity, gifting and removal from the title deeds?

Thank you.

davidmcn

JasonHappy wrote: »

Does this mean that any reference from HMRC referring to "the sale", "selling" and "sold" does include the transfer of equity, gifting and removal from the title deeds?

Yes, they just mean any disposal.

JasonHappy

For anyone reading this thread in the future, HMRC weren't much use of the phone this morning. They only have the same documents to reference as the ones published on their website. If you feel you have a bespoke query you can write or fax their office and there is a 20 say SLA on responding.

always_sunny

JasonHappy wrote: »

For anyone reading this thread in the future, HMRC weren't much use of the phone this morning. They only have the same documents to reference as the ones published on their website. If you feel you have a bespoke query you can write or fax their office and there is a 20 say SLA on responding.

It's not surprising, the details released are pretty vague. How much is her share worth? If it's less than £40k then maybe it won't even apply?

tim123456789

JasonHappy wrote: »

Thank you for your replies.

I share your opinion based on my research but my solicitor is positive we would be refunded. When I pushed him to accept liability for any money we couldn't get refunded, his advice was that if I was concerned to call HMRC (which I will do in the morning).

unfortunately, you will probably find the advice from there not worth the paper it is written on


tim

steampowered

I understand from your post that (1) the mortgage over her mum's house is in her mum's name only, and (2) your girlfriend is a co-owner of her mum's house.

Are you sure that's correct? A mortgage lender would not usually accept a situation where only one of the co-owners is a party to the mortgage, as it is very difficult to repossess half of a property.

If it is genuinely a matter of your girlfriend transferring her interest in her property to her mother, that part should be very easy and quick. But you would face a delay if she needs to get the consent of the lender.