Stamp duty on second homes

Piscesjo

My partner and I want to buy a house together in joint names. His house has now sold, I still own mine. No mortgage is involved in the purchase of the new property which will cost £565k.

Is it best to take a hit on the higher stamp duty rates as I will then technically have ownership of two homes for a while. I will be selling mine eventually.

Or is it best for my partner to buy our new house in his name and then add me to the deeds later after my house has sold? As I said no mortgage is involved and he would be “gifting “ a share of the house to me. Would stamp duty still be payable even though no cash would be changing hands and what about capital gains tax which I had a look at but which I found really confusing!

What do people think is the best way forward?? Thanks

dimbo61

I think you need to speak to a solicitor and get proper legal advice.
Are you both putting money into the new property ?
You will have to pay the extra stamp duty if you buy the new property together without selling your existing property BUT you can claim that back if you sell within a set time ( I think 3 years )

Piscesjo

My partner is financing the entire purchase from his proceeds of sale and when my house is eventually sold I will be financing improvements to the house.

00ec25

Piscesjo wrote: »

My partner is financing the entire purchase from his proceeds of sale and when my house is eventually sold I will be financing improvements to the house.

that does not answer the question

if you are recorded on the deeds as a legal owner then higher rate SDLT is payable on the whole "consideration". If you then sell YOUR property within the time limit, the extra SDLT paid can be refunded.

if you are not so recorded, it isn't

if he buys in his sole name and then adds you at a later date the consideration exchanged is £0 so not SDLT due on that given you state there is no mortgage

have you read the rules? It is all explained in there...
https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm09730

SDLT_Geek

We have to look behind who is recorded as the registered proprietor of the property at the Land Registry.


It is quite possible for a property to be registered in two names, but the beneficial interest held for one person (this is getting more common now for borrowing purposes in place of the old guarantor mortgages).


It is also possible for a property to be registered in one name, but with the beneficial interest held for two people.


Normally a declaration of trust would make the position clear.


For SDLT purposes it is the beneficial interest that matters, not in whose name the title is registered.


It sounds as if the property will initially be bought entirely using finance from your partner. So perhaps the property will initially belong entirely to him beneficially. That should mean that the higher rates of SDLT are not payable on the purchase itself.


On a true gift of a share to you later, given that there is no mortgage, there should be no SDLT due. But there is one point to watch. You say you will put money in to carry out improvements. If the facts were to be read as you being transferred a share in the property in return for the works you do, then the value of those works could be treated as "chargeable consideration" for the acquisition of your interest and chargeable to SDLT.