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Staircasing on Shared Ownership property
Marina2016
Posts: 45 Forumite
We have a shared ownership flat, in 2006 we purchased a 50% share at £95,000. At the time we didn't pay any stamp duty and didn't therefore do a market value election. We would now like to staircase to 100% but are confused about how much stamp duty we would need to pay. The property is now worth £300,000 so to staircase to 100% we would need to pay £150,000. I have looked on gov.uk but find the information confusing. There is talk about linking SLDT transactions but then says you only pay stamp duty once you own over 80% of your property. There is also talk about paying tax on the grant of the lease (not sure what that means!) and on the first lease premium.
Has anyone else staircased to 100% who could explain how I calculate the stamp duty?
Has anyone else staircased to 100% who could explain how I calculate the stamp duty?
0
Comments
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original purchase
share of property purchased 50%
amount paid to buy that step £95,000
cumulative total paid to date £95,000
SDLT threshold £125,000
is cumulative amount > threshold: yes/no?
answer = No , so not SDLT due on that step
next purchase
share of property purchased +50%. Total share now owned = 100% therefore this purchase takes you over 80% and thus triggers SDLT on the value of that step
amount paid to buy that step £150,000
cumulative total paid to date £95,000 + 150,000 = 245,000
SDLT threshold £125,000
is cumulative amount > threshold: yes/no?
answer = YES,
SDLT on step 2
125,000 @ 0% = 0
245 - 125 = 120,000 @ 2% = 2,400
adjust for apportionment 2,400 x 150/245 = 1,469
as original purchase was before 12 March 2008 the link rule does apply.
SDLT rates in 2006 was 1% up to 250k. Therefore, tax due on linked transaction: 1% x 95,000 = 950
http://www.stampdutyrates.co.uk/historic-rates.html
TOTAL SDLT payable £1,469 + £950 = £2,419
as you have not said what the rent is we cannot say if the net present value of the rent will add extra SDLT. However, it is very unlikely for such a low value property.
are you really unable to follow example 2?
https://www.gov.uk/guidance/sdlt-shared-ownership-property0
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