Minimising stamp duty??

Pixie5740

will_yateley wrote: »

so if my wife bought the new house in her name only, how much less SD would I pay (roughly)?
And would this still not count as we're married and treated as one?
And would we also get hit because the money for the deposit is raised from another property?

That depends, what exactly are you proposing? To sell all your rental properties therefore getting hit with CGT or to sell your current home and replace it with a new one or to keep the current home and your wife buy another home in her name only, not just as a legal owner but a beneficial owner as well.

Have you actually taken the time to read the SDLT manuals and guidance notes?

AnotherJoe

Whatever shenanigans* you get up to, whoever buys, whatever the source of the deposit (which is utterly irrelevant), if you do not replace your current home, but retain it, you will be liable for the extra SDLT when you buy another property, whether thats to live in or even to rent out.

* outside the much more expensive route of creating a company and moving your existing properties and placing them in that.

sparkey1

haras_nosirrah wrote: »

I am afraid that there is no way around it. You will be paying the higher rate stamp duty as you own multiple properties. It is people like yourself the legislation was designed to catch.

If you want to keep your other properties you will have the pay the additional taxes associated with the transaction.

This isnt correct. Long post!

The 3% additional stamp duty is based on primary place of residence. A couple can own 1000 Buy to Let properties, and have one property they use as their primary place of residence. If they buy another property and move into it, and dispose of their former primary residence, they do not pay the extra 3%.

If they keep their former private residence, because they haven't disposed of it they have to pay the additional 3% on the new property.

So if the OP wanted to keep the old property, and avoid the 3% on the new property they have to dispose of the old. This can be achieved by setting up a Limited Company that buys the old property.

In this case the company would pay the stamp duty on the 350K valuation. Which including the 3% surcharge equals £18000. The new property being bought by the OP would then be exempt the 3% so on a 550K purchase they would pay £17500. 35.5K total

If the Op kept the original property, and didnt sell it to a company that he forms, he would be liable to the additional 3% so the total stamp on 550K would be 34K. So in this case, its actually cheaper to not set up the lld company if all we are trying to do is save stamp. We didnt know all the figures at the start of this thread.

However the OP has indicated that he has a number of BTL properties, so going forward he is going to be hit with Clause 24 so a Ltd Coy could be a solution to cut that tax bill dependant upon circumstances

SDLT_Geek

First time buyers relief is a non starter here because the price proposed is over £500,000.

Oddly otherwise it can be possible for one spouse owning no property to benefit from first time buyers relief even though the other spouse owns properties but escapes the 3% surcharge because of the replacement exception. See the pdf linked from here: https://www.blakemorgan.co.uk/news-events/blog/sdlt-first-time-buyers-relief/

haras_nosirrah

sparkey1 wrote: »

This isnt correct. Long post!

The 3% additional stamp duty is based on primary place of residence. A couple can own 1000 Buy to Let properties, and have one property they use as their primary place of residence. If they buy another property and move into it, and dispose of their former primary residence, they do not pay the extra 3%.

If they keep their former private residence, because they haven't disposed of it they have to pay the additional 3% on the new property.

So if the OP wanted to keep the old property, and avoid the 3% on the new property they have to dispose of the old. This can be achieved by setting up a Limited Company that buys the old property.

In this case the company would pay the stamp duty on the 350K valuation. Which including the 3% surcharge equals £18000. The new property being bought by the OP would then be exempt the 3% so on a 550K purchase they would pay £17500. 35.5K total

If the Op kept the original property, and didnt sell it to a company that he forms, he would be liable to the additional 3% so the total stamp on 550K would be 34K. So in this case, its actually cheaper to not set up the lld company if all we are trying to do is save stamp. We didnt know all the figures at the start of this thread.

However the OP has indicated that he has a number of BTL properties, so going forward he is going to be hit with Clause 24 so a Ltd Coy could be a solution to cut that tax bill dependant upon circumstances

whether paying the additional 3% stamp duty on the new property or paying the additional 3% stamp duty on the old property via a limited company (which even though a seperate legal entity is still being funded by them) my point stands that they can't keep both properties and avoid the 3% stamp duty regardless of which property they pay it against.

will_yateley

Thanks for all the replies above - really appreciate it.
Maybe if this house falls through, I'll sell the current property before buying the next.