Stamp Duty for First Time Buyers

AdrianC

So if you have no links to these properties in the HMRC's eyes, and you aren't living in them...

They're clearly not rented, since you've not been declaring them on your SA...

Are they just sitting empty? Why not sell them?

CallumTurner

Two are currently used as storage for our business and one is empty.

We want to hold onto all the properties as they hold significant part of our family!!!8217;s history nd would not want to sell them.

sparkey1

CallumTurner wrote: »

If we were to change the title deeds of all the properties into say a different family member would that make us FTB/ owners m?

You could change the title deeds to someone elses name....But...Stamp Duty would have to be paid! If they already owned property, they would depending on circumstances, also have to pay the 3% second home surcharge.

HMRC definition of a first time buyer is "A first time buyer is defined as an individual or individuals who have never owned an interest in a residential property in the United Kingdom or anywhere else in the world and who intends to occupy the property as their main residence."


As you own an interest you are not a first time buyer.

00ec25

CallumTurner wrote: »

If you have no links to those properties through the HMRC but only via Land Registry

Surely we would still be classed as FTB/ Owners?

oh good grief, who do you think gets reports produced by the land registry of every property transaction in the UK?

by all means transfer all 3 inherited properties to someone else, HMRC and the Govt will be very grateful for the extensive CGT you'll have to pay on property that is not your home and never has been . Brilliant idea, well worthy of saving a few £ of SDLT.

oh and BTW when you sell them HMRC will wonder what you have been doing with them all this time? Hope you have the funds to cover your back taxes.

CallumTurner

Would it make any difference to move the property deeds into a PLC?

00ec25

CallumTurner wrote: »

Two are currently used as storage for our business and one is empty.

ever heard of the empty homes rules for council tax?

tick tock, tick tock, 2 years and counting....

00ec25

CallumTurner wrote: »

Would it make any difference to move the property deeds into a PLC?

do you seriously have involvement with a Plc, if you did then the finance staff working there would soon set you right because they will know what they are talking about

stop coming up with half baked ideas about things you have no knowledge of other than you heard a few words down the pub.

sparkey1

CallumTurner wrote: »

Would it make any difference to move the property deeds into a PLC?

No, A PLC is a company with share listed on the stock exchange. You mean transfer them to a Limited Company. Again, as you dont live in them you would have to pay a lot of capital gains tax, equivalent to your tax rate. So if your a high earner, up to 40% less reliefs.

Also the Limited Company would have to buy the properties at a reasonable market rate. That means paying stamp duty.

tlc678910

If you give your properties away (or sell them) so that after you buy the property it will be the only one you own you will no longer have to pay the additional 3% stamp duty but you will have to pay ordinary stamp duty. You are not exempt because you have owned property before.

As mentioned above capital gains tax will be due on the increase in value from when you acquired the property until when it is sold or given away. There is a capital gain allowance each year and if you have lived in the property and let them out in the past other deductions may be available.

If you give your property away with the intention it will be given back to you as a way to avoid tax you will be committing fraud.

It seems a shame to leave property sitting empty or only used for storage. Why not sell all three and add the income from that (less capital gains tax due) to your budget for purchasing and you could perhaps purchase something nice with outbuildings for storage.

If you plan ahead you can dispose of the properties over different tax years to reduce your capital gain liability. I'm not sure if a husband and wife can use both their capital gain allowances against a property held in only one of their names but you could seek professional advice around this tax planning.

Tlc

Edit: If the properties used for storage are commercial units rather than residential properties I think different rules may apply. I don't think you pay extra stamp duty when purchasing a residential property if you own a commercial unit.

Tom99

[FONT=Verdana, sans-serif]I assume the three properties you own are dwellings and not commercial?[/FONT]
[FONT=Verdana, sans-serif]If so you will pay £3,600 stamp duty on the £270k purchase plus 3%/£8,100 surcharge.[/FONT]
[FONT=Verdana, sans-serif]If you sell of give away the three properties beforehand you will only pay £3,600.[/FONT]
[FONT=Verdana, sans-serif]However you will crystallise the CGT on the three properties based on their current market value, even if you give them away.[/FONT]
[FONT=Verdana, sans-serif]Depending on you tax rate, CGT will be payable at 18% of 28% so a gain of £30k/£45k is going to give you a CGT bill of the same £8,100.[/FONT]
[FONT=Verdana, sans-serif]Its also possible HMRC might look into your gift as a sham transaction, carried out purely to avoid stamp duty rather than any real intention to gift the properties.[/FONT]