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Stamp Duty (SDLT): Ex partner buy out with help of friend
TimStrar
Posts: 2 Newbie
Long story short: I'm told approx £3915 will be payable in SDLT while I try to buy out my (unmarried) ex-partner's 50/50 share of our house with the help of a friend who already owns two properties.
The existing mortgage is being transferred into an identical one in my and my friend's name with 99% and 1% equity share respectively. They wouldn't do zero to the friend which is what we actually wanted and as I can only do this transfer (of equity and mortgage) via my existing mortgage company I don't have an option with them to transfer all in my name only.
The legal team dealing with the remortgage/transfer tell me that as the new mortgagee (friend) has another property, then the ex-partner's 50% share of the mortgage debt is used to calculate SDLT which works out at nearly 4K under the 2016 rules.
Is this correct? Is there any way around it? Why is the 1% share of the new partner not used in the calculation?
Also, did I read somewhere that if the plan is to sell this house in a year or two after some renovations then maybe the tax can be reclaimed later?
My friend was just doing this to help me out of a difficult situation and we didn't reckon on the extra tax costs. It seems quite unfair on what is essentially my house (where only I live now or in the future and my friend otherwise won't have anything to do with the property).
The existing mortgage is being transferred into an identical one in my and my friend's name with 99% and 1% equity share respectively. They wouldn't do zero to the friend which is what we actually wanted and as I can only do this transfer (of equity and mortgage) via my existing mortgage company I don't have an option with them to transfer all in my name only.
- House value: circa £350K
- Mortgage (approx): £257K
- Payment to ex: £20K
- This house is my only and principle residence
- Ex-partner moved out in 2015
- Friend helping will not live at or have any say in the property
The legal team dealing with the remortgage/transfer tell me that as the new mortgagee (friend) has another property, then the ex-partner's 50% share of the mortgage debt is used to calculate SDLT which works out at nearly 4K under the 2016 rules.
Is this correct? Is there any way around it? Why is the 1% share of the new partner not used in the calculation?
Also, did I read somewhere that if the plan is to sell this house in a year or two after some renovations then maybe the tax can be reclaimed later?
My friend was just doing this to help me out of a difficult situation and we didn't reckon on the extra tax costs. It seems quite unfair on what is essentially my house (where only I live now or in the future and my friend otherwise won't have anything to do with the property).
0
Comments
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Won't the SD be £4,925?
Based on (£257k/2+20)=£148.5K
The two sums added together make the total consideration and I don't think it matters whether that buys you 1% or 50%.
You will not be able to reclaim the tax if you later sell.0
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