Stamp duty surcharge if inherited 50% of property abroad over three years ago?

Paula1987

Hi everyone,
I am a bit confused about whether I will be charged the 3% stamp duty surcharge. I am from Spain but been living in the UK for over 10 years. I was only a student when I moved here, but I jointly owned 50% of the family home in Spain with my brother after our mother passed away. I have always lived in rented accommodation in the UK, and I am finally buying a house. Now it turns out that I may have to pay the 3% surcharge as after buying my house (which will be my first time ever purchase, and also my main residence) I will own more than one property, but also because even if this house I am buying will be my main residence, I won't have had to sell anything to buy it.
To me this seems bonkers because according to the law then in order to get away without paying the extra 3% I would've had to sell my 50% of the family home where my brother and my father lived at the time (and they still do!) before moving to the UK in order to buy my main residence here. Furthermore, even if I sold my share of that property today, I wouldn't qualify to be let off without the 3% surcharge, as that home isn't my main residence anymore! This 3% means that I am going to be paying £18,000 in tax, instead of £7,000 - quite a bit.
I was wondering whether anyone has had any similar experiences or knowledge of it? I know the law says that if I inherit property in the three years before purchasing the property I don't have to pay the 3% surcharge, but it's been over 3 years now.
Any help will be greatly appreciated.
Thanks!

da_rule

If, on the day you buy the new house you still own a share of the Spanish house then you will have to pay the higher rate.

However, if you get rid of your share in the Spanish house before buying over here then you will only have to pay the standard rate.

Paula1987

Thank you, I get that. But as I said a) my family still lives in that house so I would have to kick them out first and b) I only own 50% of it, so it is not up to me to sell it (and neither dad nor my brother can afford to buy my half). It just seems like the law wasn't written with cases like mine in mind?

mije1983

Can your brother/father not buy you out if the pool together rather than one or the other? Another option may be to transfer over your 50% to your father.

Doesn't really matter whether the law was written with cases like yours in mind, it's the law and without disposing of your 50% interest, you will have to pay the higher rate.

It might not seem fair to you, but that's the way it is unfortunately.

da_rule

Paula1987 wrote: »

Thank you, I get that. But as I said a) my family still lives in that house so I would have to kick them out first and b) I only own 50% of it, so it is not up to me to sell it (and neither dad nor my brother can afford to buy my half). It just seems like the law wasn't written with cases like mine in mind?

You're a joint owner of a property, this isn't uncommon. Many people co-own properties where one party lives in the property and the other doesn't (separated couples, parents and children etc).

Yes, selling your share without the other co-owners consent could be problematic (not an expert on Spanish property law). But it is also problematic to sell a property co-owned in the UK when one party doesn't want to sell.

As has been suggested, can the other owners buy you out? Or can you gift them your share of the house (if this is allowed under Spanish law)?

PThome

I was exactly in the same situation when I first bought 2 years ago... I have a 1/3rd of a house (shared ownership with my two sisters) and there is no way around it. Although I never bought any property, because I have this share I couldn't have an help to buy ISA account, couldn't have access to any of the first time buyers incentives and have to pay the stamp duty tax.

Unfortunately the system doesn't take into account issues like this.

Good luck with your purchase.