Stamp duty on staircasing

00ec25

Finance Act 2003 schedule 9 para 4: staircasing
https://www.legislation.gov.uk/ukpga/2003/14/schedule/9

there are 2 elements to the chargeable consideration for SDLT on a staircase transaction
a) the value calculated by the HA for the rent element (which is then subject to a net present value calculation to decide if it is added to the chargeable consideration for overall SDLT purposes)
and
b) the value calculated by the HA for the non rent (ie the premium) element

as you are staircasing to 100% the rent is £0 and the premium is £97,500 given you have confirmed in a message that the HA has used tat figure in their memo of staircasing

your calculation of £402 is thus correct

J1302526

Hi just wanted to know how you got on with your transaction as I am about to go through exactly the same and seems unfair to pay £900 as I believe it on my property of which I will only own 100% from 50% for a few minutes until it is then sold to my buyers at full market price in a simultaneous transaction. Really look forward to hearing a reply as solicitor can't find any evidence on it and says we have to pay. All information greatly appreciated thanks

00ec25

J1302526 wrote: »

Hi just wanted to know how you got on with your transaction as I am about to go through exactly the same and seems unfair to pay £900 as I believe it on my property of which I will only own 100% from 50% for a few minutes until it is then sold to my buyers at full market price in a simultaneous transaction. Really look forward to hearing a reply as solicitor can't find any evidence on it and says we have to pay. All information greatly appreciated thanks

in order to own 100% you have to buy the bit you do not already own, your case that means you have to buy 50% of the property. How is that unfair? You expect to be paid in full for selling 100% don't you? Yet at the moment you only own 50%, so feel free to sell only 50% and get only 50% of the money if you want "fair".

You have to pay SDLT, if applicable, on that staircase purchase transaction. It cannot be clearer. I wonder why your solicitor is even trying to "look" as they ought to know this off the top of their head. Are you using a proper solicitor or a "conveyancer"?

J1302526

Firstly there is no need to be so rude! The point of a forum is to find out what people did in a similar situation.

Clearly you didn't read my post correctly as it seems unfair that I have owned 50% only of my property for 10 years however instead of just selling 50% as it's near impossible in my situation I am allowed to sell it for 100% of market value but on completion I own it for a few minutes then it gets immediately transferred to my buyers. So my argument is I will have to pay sdlt £900 on £170000 and so will my buyers for effectively the same transaction. This is known as back to back or simultaneous staircasing. It is a very grey area with shared ownership properties and hmrc don't seem to be very clear about the subject. My solicitor is very good and also done alot of research and spoke to hmrc!

If you can't respond with anything useful then please don't respond at all.

J1302526

I have also done lots of research and apparently even subsale relief does not even apply to back to back staircasing.

00ec25

J1302526 wrote: »

I have also done lots of research and apparently even subsale relief does not even apply to back to back staircasing.

you are required to back to back therefore you are required to buy the 50% you don't own, therefore you are required to pay the SDLT due on that.

"fairness" has nothing to do with it, those are the rules. Carry on researching...

https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm21500

https://www.legislation.gov.uk/ukpga/2003/14/part/4

https://www.legislation.gov.uk/uksi/stamp%20duty%20land%20tax

BP_SE18

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.

BP_SE18

BP_SE18 wrote: »

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.

People may find the answer to this in their Leasehold document. If you can't find it, you can obtain a copy from the Land Registry. I for example had no idea, if I or my solicitor had made any decision on this (without me knowing) back in 2010. You should find that the Freeholder/Landlord has already declared this and it is contained within the Lease (as a condition etc.). So it should not be too difficult to ascertain, unless of course, you have a copy of the HMRC form ('SDLT6') submitted after your initial purchase?


"The Landlord and the Leaseholder hereby confirm that the Market Value of the premises (as defined in the xx Schedule hereto) is the Initial Market Value and that they intend stamp duty to be charged in accordance with Section 97 Finance Act 1980 (as amended) by reference to the said Market Value".