tennents in common stamp duty

M1JWR

Property here is to be split, there are 3 tennents in common.
one part is worth 105,000 we'll call it A
the other is 210,000 call it "B"
The three tennents in common are supposedly to sell A to one tennent in common
and B to the other two tennents in common.
the thing i dont understand is the 3 tennents in common sell B to the two for 210,000 would you pay stamp duty on the 210,000 when you tecnically own 2 thirds of it
the tennents in common would obviously be finished at that point.
signed confused !!!

G_M

M1JWR wrote: »

Property here is to be split, there are 3[STRIKE] tennents[/STRIKE]tenants in common.
one part is worth 105,000 we'll call it A
the other is 210,000 call it "B"
The three tennents in common are supposedly to sell A to one tennent in common
and B to the other two tennents in common.
the thing i dont understand is the 3 tennents in common sell B to the two for 210,000 would you pay stamp duty on the 210,000 when you tecnically own 2 thirds of it
the tennents in common would obviously be finished at that point.
signed confused !!!

So currently this is a single property, registered at the Land registry in 3 names yes?

The property is being divided somehow. Are there 2 seperate properties on the land in question? Has a surveyor drawn up plans?

T1 (tenANT 1) is paying £105K to T1,T2 & T3, who will receive £35,000 each.

T2 & T3 are paying £210K to T1,T2 & T3, who will receive £70,000 each.

(in both cases this assumes the 3 tenants in common own equal shares of the existing property.)

I'm not a lawyer, or tax expert, but my understanding is that in each case a TP1 is required, with supporting plans etc, and SDLT would be paid on the £210K purchase price. I don't believe the fact that the puchaser is (in part) paying himself makes a difference as a new Title will be created for what he is purchasing.

But I may be wrong. Perhaps SDLT only applies to the 1/3rd of the property being transferred - so SDLT would be calculated on £70K.

Doubtless your conveyancer will know.

If you are planning on DIY conveyancing, I advise against it in this case as

a) it's not a straight-forward sale/transfer, and

b) you have demonstrated you are not sufficiently informed

M1JWR

So if t2 and t3 remain as tennents in common on B they cannot be liable
as their equity will be 105k each max

BrassicWoman

M1JWR wrote: »

So if t2 and t3 remain as tennents in common on B they cannot be liable
as their equity will be 105k each max

I think GM is suggesting seeing lawyer/ tax expert to answer that question, which seems like wise advice.

getmore4less

need to describe the situation better.

who owns the property now?

Who will own it in the future.

What consideration is changing hands?

SDLT is levied on the purchasers on the consideration.

M1JWR

The answer is
As the whole is owned by all 3 tenants in common in equal shares
to make two titles, it goes like this
the 2/3rds of A is bought by T1 off T2 and T3 for 70k which is 2/3rds value of it.(105k)
and 1/3rd of B is bought by T2 and T3 off T1 for 70k whch is 1/3rd value of it (210k).
you cannot buy whats already yours.
thats from a tax expert

G_M

M1JWR wrote: »

you cannot buy whats already yours.
thats from a tax expert

Then what more can you learn here,,,,,,,,,?

getmore4less

Is the one property getting split into 2?

getmore4less

I think what you have been trying to say is

The property is being split in 2 and each current beneficial owner will retain the same beneficial interest, 1 with become the sole owner(legal and beneficial) of one bit, the other 2 the other part.

Nothing is being sold to anyone and the there is no consideration changing hands.


or you can do it the hard way and split the title first so each owns a 3rd of each property.

then you have a connected transaction where consideration of £70k changes hands on both properties.

M1JWR

that is correct
no matter how menial we have all learned something here if the subject ever crops up again

00ec25

M1JWR wrote: »

that is correct
no matter how menial we have all learned something here if the subject ever crops up again

not sure what you think people will learn as this thread is very confusing

if someone pays you actual real hard cash in return for (even a share of) ownership of a property then that is chargeable consideration and is the amount upon which SDLT will be calculated as per the SDLT thresholds.

if no cash changes hands but there is a mortgage involved the mortgage balance can be chargeable consideration depending on the circumstances

if there is no cash and no mortgage but existing owners decide between themselves to alter their respective ownership shares then no chargeable consideration is involved and no SDLT.

You don't have to be a "tax expert" to know this, all you have to do is read the .gov website https://www.gov.uk/stamp-duty-land-tax/overview