Stamp duty 1st time buyer with property owner partner

Mart3433

Hi. Me and my partner (unmarried) are moving house, upsizing. My partner owns our current house which will provide a nice deposit for our new house. We're looking into buying in my name only to avoid paying stamp duty (£4.5K saving). I have a few questions -

1. Is this legal? Or are we asking for trouble down the line. We're not rule breakers.

1. Is it easy (at a later date) to reinstate my partner so our new house is jointly owned. I understand this would require contacting lender, for which there could be a fee. We're likely to put her back on after our intended 5 year fixed comes to an end. Also we'd need to complete a TR1 for putting her name on the deeds?

2. Is there any tax implications when she gets reinstated (we will only ever own one home each, our main residance). I guess this could mean it's not worth doing in the first place. I've heard of people getting caught in the second home additional Stamp Duty fees (+3%<) by putting their name on the deeds of a second property. Can this happen with the normal (one home only) stamp duty too?

3. We're going to make sure we have a will in place to cover ourselves. Is this adequate in the event of me dying?

I understand the implications of splitting up etc but we're not concerned about this. No need for advice on that aspect. Also mortgage approval for me only is fine too.


Many thanks in advance for any advice

davidmcn

Mart3433 wrote: »

Also mortgage approval for me only is fine too.

Is that with the lender knowing that the deposit is coming from your partner?

Mart3433

"Is that with the lender knowing that the deposit is coming from your partner?"


I'm unsure about that. Does the mortgage lender question where or who the deposit cones from?

Mart3433

Thanks. Why would she be liable to pay Higher Rate Stamp Duty? Just to clarify, in that scenario, I would be a single property owner. She would have no house in her name and would be applying to jointly own mine. Would it not be basic rate stamp duty payable if she becomes a beneficial owner?


Thanks for the replies

Thrugelmir

Mart3433 wrote: »

I'm unsure about that. Does the mortgage lender question where or who the deposit cones from?

The solicitor will do on behalf of the lender at the very least.

davidmcn

Mart3433 wrote: »

Does the mortgage lender question where or who the deposit cones from?

Yes. By default they'll expect all of the deposit to come from your own funds. They might accept a gifted deposit, i.e. a genuine no-strings-attached gift from family. A "gift" from someone who expects something in return (e.g. a partner who is hoping you'll let her live in your house) might not go down well with lenders, so you'd be restricting your mortgage choices. I'm not sure to what extent though, the brokers here might be better able to advise. But you'd better check out the mortgage position before you start worrying about what the stamp duty will be.

00ec25

Mart3433 wrote: »

Thanks. Why would she be liable to pay Higher Rate Stamp Duty? Just to clarify, in that scenario, I would be a single property owner. She would have no house in her name and would be applying to jointly own mine. Would it not be basic rate stamp duty payable if she becomes a beneficial owner?

ok i misread

she will be selling the current home
you will be buying the new home as a FTB in order to evade SDLT by claiming the FTB exemption

when you add her at a later date she will pay standard rate SDLT