Complex Stamp Duty Query

nutmegsam

Good Evening,
I had a good look around MSE forums but couldn't easily find someone in quite the same situation.

My Partner and I are in the process of buying our first house together and aren't quite sure what would happen in regards to the additional stamp duty charge of 3% given our situation. We are both fortunate (and unfortunate enough depending on how you look at it) to have inherited money from grandparents that is tied up properties.

Our Situation:
1. I myself own a portion (24%) of a small house. My mother owns the other 76%. We rent it out and split the profits.
2. My partner has a 33% stake in a house she shares with her sisters and rents out AND for some reason has a minimal stake in her grandmothers home (maybe 5%), that her grandmother lives in.
3. We are currently renting completely separately
4. We are looking to buy together and know that we would have to pay an extra 3% on any house purchased in addition to the other 3 we already partially own together/have a stake in.
5. To contribute to a deposit, I would have to sell my 24% stake in the house my mother and I rent out - my Mum believes that should not be a problem, she should be able to remortgage her own place
6. My partner has the ability to contribute to a deposit separately - i.e. she would still have a stake in 2 houses

My question is:
If I were to 'sell' my 24% stake to my Mum would my partner and I have to pay the additional 3% of stamp duty on the home we buy together
(--> or, by selling my 24% stake to my Mum, would the number of houses we (my partner and I) owned not be increasing with a joint house purchase - therefore meaning we avoid the hefty increase in stamp duty)

Any insight would be hugely appreciated. Many thanks..

da_rule

Your partner will still end up owning more than one property so the higher rate will be payable.

That is unless her shares in the other houses are worth less than £40,000 each.

Obviously when you sell your share of the rented property you will potentially have a capital gains tax liability to pay as well.

Pixie5740

nutmegsam wrote: »

Good Evening,
I had a good look around MSE forums but couldn't easily find someone in quite the same situation.

My Partner and I are in the process of buying our first house together and aren't quite sure what would happen in regards to the additional stamp duty charge of 3% given our situation. We are both fortunate (and unfortunate enough depending on how you look at it) to have inherited money from grandparents that is tied up properties.

Our Situation:
1. I myself own a portion (24%) of a small house. My mother owns the other 76%. We rent it out and split the profits.
2. My partner has a 33% stake in a house she shares with her sisters and rents out AND for some reason has a minimal stake in her grandmothers home (maybe 5%), that her grandmother lives in.
3. We are currently renting completely separately
4. We are looking to buy together and know that we would have to pay an extra 3% on any house purchased in addition to the other 3 we already partially own together/have a stake in.
5. To contribute to a deposit, I would have to sell my 24% stake in the house my mother and I rent out - my Mum believes that should not be a problem, she should be able to remortgage her own place
6. My partner has the ability to contribute to a deposit separately - i.e. she would still have a stake in 2 houses

My question is:
If I were to 'sell' my 24% stake to my Mum would my partner and I have to pay the additional 3% of stamp duty on the home we buy together
(--> or, by selling my 24% stake to my Mum, would the number of houses we (my partner and I) owned not be increasing with a joint house purchase - therefore meaning we avoid the hefty increase in stamp duty)

Any insight would be hugely appreciated. Many thanks..

Goodness knows how you managed to miss all the threads about the higher rate of SDLT on the forum from those in very similar positions to yourself.

Why not try reading the guidance note for the higher rate of SDLT to find out if it will apply?

Tom99

If the 33% owned house is worth more than £121k you will pay the extra 3%

00ec25

Tom99 wrote: »

If the 33% owned house is worth more than £121k you will pay the extra 3%

£121,212 to be precise

saajan_12

nutmegsam wrote: »

1. I myself own a portion (24%) of a small house. My mother owns the other 76%. We rent it out and split the profits.
2. My partner has a 33% stake in a house she shares with her sisters and rents out AND for some reason has a minimal stake in her grandmothers home (maybe 5%), that her grandmother lives in.

(--> or, by selling my 24% stake to my Mum, would the number of houses we (my partner and I) owned not be increasing with a joint house purchase - therefore meaning we avoid the hefty increase in stamp duty)

If your shares in other properties at the point of purchase exceeds 40k, then higher rate SDLT applies. It's buying an additional property that counts, not the total number.

Selling a property is only relevant when it is your main residence.

00ec25

saajan_12 wrote: »

If your shares in other properties at the point of purchase exceeds 40k, then higher rate SDLT applies.

if your share of any one single property is >£40k is the correct answer.

Your wording is ambiguous and could be taken to mean cumulative total of the shares, which is wrong.