Stamp duty on Inherited property

claudyman

Hi

My wife and her sister inherited a property worth 560k.
We want to sell our house and buy her sister out of her half and move into the house as our main residence.
Will we pay full stamp duty on the 560k or do we only pay 50% as my wife inherited half the property?


Thanks

kinger101

You pay SDLT on the consideration - i.e., £280K if that's what you pay.

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Tom99

[FONT=Verdana, sans-serif]Assuming the property is not mortgaged, only on the amount you pay for the 50%.[/FONT]
[FONT=Verdana, sans-serif]There may eventually be a CGT calc to do when you eventually sell if the probate value of the property was less than £560k[/FONT]
[FONT=Verdana, sans-serif]If sister has not been living in the property as her main residence then she may have a CGT liability now if probate value less than £560k.[/FONT]

kinger101

There may eventually be a CGT calc to do when you eventually sell if the probate value of the property was less than £560k[/SIZE][/FONT]

Technically incorrect. The base cost for OP will be 50% of probate value, plus 50% of the open market value when the property sells. Whether OP pays CGT depends on whether they resided in the property (likely, therefore exempt), and how much they sell if for.

For OP's SIL's CGT, the consideration will be based on the open-market value.

Tom99

kinger101 wrote: »

Technically incorrect. The base cost for OP will be 50% of probate value, plus 50% of the open market value when the property sells. Whether OP pays CGT depends on whether they resided in the property (likely, therefore exempt), and how much they sell if for. .

[FONT=Verdana, sans-serif]For CGT proposes the acquisition date of the 1st 50% is the date of death and therefore there is a period of time when the OP will not have lived in the property, hence a CGT calc is required even if tax turns out to be £nil.[/FONT]

claudyman

Hi , sorry but thought I would get a notification when people replied to this query and then just forgot about the post. Thanks for the replies


Unfortunately we were unable to sell our house so we will be keeping it and renting it out.
I believe as this is a second property I will now have to pay a higher rate stamp duty when buying my sister in law out of the 560k property . What will the SDLT be when buying this property for 560k.


Will it be 8% of 560k or 280k.


Thank you

da_rule

It will be on the amount you pay for the share in the property you are buying.

SDLT_Geek

SDLT at higher rates (with the 3% surcharge) on £280,000 (assuming that is what you are paying) is £12,400.

AdrianC

The very thread title answers the question...

You don't pay SDLT on property you inherit. In this case, that's 50% of the property.
You DO pay SDLT on property you buy. In this case, that's the 50% of the property somebody else inherited...