Any Options To Avoid Additional Stamp Duty?

AdrianC

ConGirlRed wrote: »

I was debating gifting my house to my mum and she leaves it back to me in her will, while I continue to pay the outstanding mortgage

Your lender will not like that one tiny bit - she would need a mortgage in her name to go with the transferred ownership of the property. You could, of course, gift her the monthly payments...


If she owns two properties, then the chances are high that her estate would be liable for IHT on her death - and if she needs residential care, or gets into financial difficulty, then both the properties she owns would would certainly be within her assets.

Does anyone have any ideas on how I can get round this, without having to sell my house and make my mum go back to her inherited property?

Pay the tax.

ConGirlRed wrote: »

Really? So I will be charged 3% because I own it, then I can't reclaim it if I buy with the boyfriend and sell it within 3 years, because I don't live there??

Correct. You do not live there. You are not replacing your primary residence.

I kept my house for my mum to move into if she wanted to, when my Stepdad died.

Why doesn't she live in the house she owns? Is that rented out, or simply sat empty? Perhaps she could sell that, and buy the one she does live in?

And now I will have to pay severe amounts of tax... so comments like this don't help my situ!

Sorry, but they're simply accurate.


You own one house that you do not live in. You want to buy a second house. You are therefore legally liable for +3% SDLT on that second purchase. Trying to find ways to not pay that are - quite simply - tax evasion. Tax avoidance would be selling the original property, or not being a part-owner of the new one.


I do find it strange that somebody will give away a substantial asset to avoid paying a relatively small amount of tax. It's almost as if they know they aren't really "giving it away"...

Pixie5740

Your mum sells the property she has inherited and uses the money to buy the property she lives in from you.

Crashy_Time

Keep all the properties and cough up the tax, or sell now before interest rates start rising and your properties are worth a lot less.

00ec25

ConGirlRed wrote: »

I kept my house for my mum to move into if she wanted to, when my Stepdad died. And now I will have to pay severe amounts of tax... so comments like this don't help my situ!

since your question revolves entirely around whether you wish to commit tax evasion or not then yes, that is what needs to be asked.

- you own a property
- you cannot be party to the purchase of another property without being subject to the higher rate SDLT unless you wish to commit tax evasion. That said it is unlikely you would succeed in evading anyway.

Your mother has a property of her own so don't try and come the its to help her angle. She sounds like she can look after herself.

your options:
- let the BF buy in his name only.
- gift the property to mother (and deal with any Capital gains tax due given it is no longer your main home)
- sell the property and buy the new one jointly with BF as a solo property owner
- keep the property, buy with BF and pay the higher rate

System

Pixie5740 wrote: »

Get married and move in with your boyfriend/husband. Then sell the property he owns and then buy a new home together.

We have discussed that, but I assumed it wouldn't change if we are married or not as I still own a property in my name only which I would rather keep.

Just want to clarify... so if my house IS my main residence I am obviously liable for the 3% but I CAN claim it back.
If it IS NOT my main residence I am liable for the 3% as I own it, but CANNOT claim it back?
Seems I am damned if I do and damned if I don't.

Pixie5740

ConGirlRed wrote: »

We have discussed that, but I assumed it wouldn't change if we are married or not as I still own a property in my name only which I would rather keep.

Just want to clarify... so if my house IS my main residence I am obviously liable for the 3% but I CAN claim it back.
If it IS NOT my main residence I am liable for the 3% as I own it, but CANNOT claim it back?
Seems I am damned if I do and damned if I don't.

You know what happens when you assume.....;)

Have you read the guidance note?

noddynoo

For goodness sake you have stakes in multiple properties whilst some people are sleeping in doorways Play the bloody tax

System

Yes thanks, but it baffles me, hence posting here to get complete clarity.

noddynoo

Its not an achievement it is a ponzi scheme which has left many people unable to buy their own home and many more due to lose or be in negative equity once rates rise. Pay up that is advice

Pixie5740

ConGirlRed wrote: »

Yes thanks, but it baffles me, hence posting here to get complete clarity.

I think it's one of the easier tax guides to read especially as it has the examples in the last few chapters. Examples like this one in Chapter 9:

Mr and Mrs S, a married couple, each own a residential property, with neither having any interest in the other’s property. They both live in the property owned by Mrs S: the property owned by Mr S is rented out. Mrs S is selling her property and they are jointly purchasing a new one, which will be their new main residence. Mr S will retain his rented out property.

The higher rates will not apply to the joint purchase by Mr and Mrs S of a new main residence. As they are married and have both lived in the property owned by Mrs S as their main residence they will both be treated as replacing their main residence.