Staircasing 100% assigned lease of shared ownership SDLT??

Alex_Selis

Hello All,
I have done my best in resolving this within the HRMC guides but I still have some doubts.

This is my case and I would like to have some advice if anyone can give it.

In 2014 I bought a shared ownership share resale of 25% for 75000 (market value 300K) at the same time I staircased 35% more for 105000, bringing my share to 60%. The original owner did not elect for market value and I did not pay any SDLT as it was not due until staircasing 80%+.

Now I buying the remaining 40% for 160000 being the market value now 400K.

How would you calculate the SDLT?
Would you consider for the first transaction 105000 (35%) or 180000(60%) to apportion the SDLT within the linked transacton under my name, considering the first owner already declared the first 25% when the lease was granted and no market value option was selected?

% Value paid value staircased above first grant
60% 180000 105000
40% 160000 160000

tot 340000 265000

Any idea?

Thanks

Alex_Selis

Hello,

I have now revised the calculation. Is anyone able to provide an opinion?

£0-£125,000 0% £125,000.00 =£-
£125,001-£250k 2% £125,000.00 = £2,500.00
£250,001-£925k 5% £90,000.00 = £4,500.00


Amount paid standard SDLT Factors on last transaction SDLT Due
£340,000.00 , £7,000.00 * 0.470588235 = £3,294.12

SDLT_Geek

I am not 100% sure of this, but I think the calculation is as follows:

We ignore the £75K for the assignment for the present calculation, that was paid to a party (the seller of the lease) unconnected to the landlord to whom other payments have been made to staircase.

We aggregate the £105K and £160K to give £265K.

SDLT on £265K would be £3,250.

But we pay SDLT only on a proportion of that, it is only paid on the staircasing that gets you over 80% (on £160k).

The proportion is 160/265.

That gives SDLT due of £1,962. That is lower than OP makes it.

I would be interested to know if others agree or disagree.

Alex_Selis

Thank you for your comment SDLT Geek.

This is exactly where I am as well, however, initially, I did the same calc you proposed but then I had this fear that HRMC might just take the full value. This will be the next round of questions in this forums relation to SDLT on shared ownership as a lot of people will start staircasing to 100%, after they had bought a resale portion from the original leaseholder, therefore, having the lease assigned and not first granted.HRMC seems to ignore this scenario in their examples. If we found the correct answer it will help me but also a load of people other people which are not staircasing since are concerned the SDLT due is higher than what they can afford. Do you know anyone on this forums can give us a second opinion?

Thanks again.