Stamp duty on staircasing

Turks78

I am hope I can get help on my staircasing and selling on.
I acquired my property through shared ownership in 2010 for £60,000(50%) when the market value was £120,000. No stamp duty was paid at the time and I didn't know about the options of paying stamp duty on shared ownership at the time.So I am not sure what option was chosen for me by the solicitors.
I am in the process of selling now and the solicitors are asking how much stamp duty I will be paying as I am doing back to back staircasing.
Can someone please help with the calculation with the property valued at £220000 now?
Also do I fill the SDLT1 now or after completion? As the solicitor is demanding I do it now.
Help will be much appreciated.

00ec25

Turks78 wrote: »

I am hope I can get help on my staircasing and selling on.
I acquired my property through shared ownership in 2010 for £60,000(50%) when the market value was £120,000. No stamp duty was paid at the time and I didn't know about the options of paying stamp duty on shared ownership at the time.So I am not sure what option was chosen for me by the solicitors.

your question is impossible to answer until you know

given the market value was £120k that was (just) below the nil rate SDLT band (£125) so if a market value election was made, you owe nothing now upon staircasing. So you MUST find out what your old solicitors did otherwise you could end up paying tax you don't have to

if necessary ask HMRC for its records related to your original purchase, after all they are the ultimate record keeper as SDLT is their tax .

Turks78 wrote: »

I am in the process of selling now and the solicitors are asking how much stamp duty I will be paying as I am doing back to back staircasing..

what do you mean by back to back?

if you do need to pay SDLT is will be leveied against the transaction which takes you over 80%. So if you are doing a single jump from 50% to 100% it would be levied on 220k x 50% adjusted by the apportionment factor

read the examples:
https://www.gov.uk/guidance/sdlt-shared-ownership-property

Turks78

Thank you for the response.I will contact HMRC as suggested.
What I meant with the back to back staircasing was, as I am selling I need to staircase to 100% before I could sell which I believe will happen simultaneously.

Turks78

Urgent help please!!! As per my previous post about stamp duty payable on a shared ownership property as I do not know what election was made when the property was bought.
I have been in touch with the HMRC but it will take long in getting the information as I am selling so I have decided to ignore that and pay the stamp duty for the staircasing. Can I please have assistance with calculating the stamp?
Original price was £120,000
Bought 50% for £60,000
Market Value £220,000

As per my calculation am getting £1,229.Am I right?

Turks78

I have questioned the solicitors but they are saying they are not able to do that because it staircasing (not sure why that makes a difference).I have given up on chasing the info from HMRC because it has been difficult dealing with the HA so don't want to hang on for too long.

Working: 220,000- 125,000 =95,000
2% x 95,000 =1,900

Buying the remaining 50%
110,000/170,000 x 1,900 = 1,229

00ec25

Turks78 wrote: »

I have questioned the solicitors but they are saying they are not able to do that because it staircasing (not sure why that makes a difference).I have given up on chasing the info from HMRC because it has been difficult dealing with the HA so don't want to hang on for too long.

Working: 220,000- 125,000 =95,000
2% x 95,000 =1,900

Buying the remaining 50%
110,000/170,000 x 1,900 = 1,229

no

You originally paid 60k for 50% but you purchased after March 2012 so the linked transaction rule does not apply to that expenditure

you are now paying a further 160k to get you to the (current) market value of 220k for the remaining 50%. In so doing you cross the 80% threshold, and thus have to physically pay SDLT on the transaction which takes you over that threshold, which in your case is a single transaction from 50% to 100%

you will have paid a total of 220k (60 + 160)
the first 60 k was below the SDLT threshold (125k) so had zero SDLT payable
the next (and final) transaction for 160k takes your total expenditure to 220k and thus SDLT is:
125k @ 0%
(220 - 125) = 95k @ 2% = 1,900

adjust for apportionment factor 1,900 x 160/220 = £1,381.82

you have not applied the correct apportionment factor. It is based on the total spend to date (60+160) = 220 divided by the value of the current transaction (which in your case is the 160k) needed to take you from the 50% you currently own (for which you paid 60k) to the 100% you want to own (valued at 220k)

this is shown in example 2. I have no idea where you got 110/170 from

Turks78

Thank you very much for such a detail explanation.As I will be paying the HA 110 for the final staircase knowing I owe 110(50%) I thought the total payment to the HA will therefore be 60k+110K=170k. Probably did not understand the statement well.Thanks for explaining.Now I have a rough idea what to pay.

Finally,as explained I am staircasing and selling simultaneously.My solicitor is asking me to fill the SDLT 1 and send to HMRC. Anyone with an idea when this needs to be done ?

Time2go

My advice is to get a proper solicitor for me sdlt is part of conveyancing and no way you should be expected to do it.

Can't you contact the solicitors you used when you purchase property to find out how much stamp duty you paid.

Turks78

Turks78 wrote: »

I am hope I can get help on my staircasing and selling on.
I acquired my property through shared ownership in 2010 for £60,000(50%) when the market value was £120,000. No stamp duty was paid at the time and I didn't know about the options of paying stamp duty on shared ownership at the time.So I am not sure what option was chosen for me by the solicitors.
I am in the process of selling now and the solicitors are asking how much stamp duty I will be paying as I am doing back to back staircasing.
Can someone please help with the calculation with the property valued at £220000 now?
Also do I fill the SDLT1 now or after completion? As the solicitor is demanding I do it now.
Help will be much appreciated.

Thank you for your advice and sorry for the confusion as I did post some figures in my initial post.I do appreciate your response thanks.

Turks78

Hi All Thank you for your response to my post.
I did submit the SDLT 1 form to my solicitors so submit on completion but they have returned the forms that I should be paying stamp duty on the whole selling price . I will try and explain things a bit more so I know where I stand with the solicitors.

The HA gave me the option to sell on the open market after they have valued the property for £195,000.
I bought 50% of the property which I paid £60,000 when the value was £120,000 in 2010.So no stamp duty was paid at the time as it was below the threshold.
I have a buyer who I am selling to for £220,000 but obviously I have to staircase to 100% before I can sell.The HA memorandum of staircasing indicate I pay them £97,500(50%) based on their valuation.
Now my solicitors who asked me to seek advice on the stamp duty payable because they won't be doing it has returned the completed form i sent to them that I should be paying stamp duty on £220,000.
I want to establish my stand before I call them so please advice with my stamp duty calculation.
Please let me know if I have missed any vital information to aid the calculation.

Original purchase 60,000(50%)
Now Purchasing extra 50% for 97,500
Total Paid 157,500
so 157000-125000=32500
32500 x 2%=650
97500/157500 x 650=402 Liability due.
Many Thanks in advace.

Turks78

Time2go wrote: »

My advice is to get a proper solicitor for me sdlt is part of conveyancing and no way you should be expected to do it.

Can't you contact the solicitors you used when you purchase property to find out how much stamp duty you paid.

Unfortunately it's too late to think of changing solicitors.