Stamp duty on shared property

Flim

Hi all,

Myself and sister inherited a house a few years ago which we decided to keep and rent out. If one of us decided to sell our share and the other decided to buy them out I assume the “buyer” would be liable for stamp duty on half the value of the property?
Just wondered if somebody could confirm this please.
Many thanks

Slithery

How much is the property worth?
Does the buyer already own another property?

Flim

Property is worth about £160k (total), and we both own our own properties.

00ec25

Flim wrote: »

Just wondered if somebody could confirm this please.
Many thanks

since it is not the main home of the buyer, the higher rate applies to them,
but the SDLT would be based on the cash actually paid, not a notional "half" value

read the rules
https://www.gov.uk/guidance/stamp-duty-land-tax-buying-an-additional-residential-property

Tom99

Flim wrote: »

Hi all,

Myself and sister inherited a house a few years ago which we decided to keep and rent out. If one of us decided to sell our share and the other decided to buy them out I assume the “buyer” would be liable for stamp duty on half the value of the property?
Just wondered if somebody could confirm this please.
Many thanks

I think stamp duty at 3% will be paid on the price the buyer pays but CGT will assume the property was sold at open market value if that is different since the deal is not at arms length.

G_M

Tom is right though he assumes the seller is not living there. OP said they each have another property, but not which one they live in as their main residence.

But yes, if the seller does not live there, then their Capital Gains Tax would be based on the increase in value from 50% of the probate value to 50% of the market value at date of the transfer.

The buyer would pay 3% SDLT on the purchase price as it is a 2nd property.

SandraX

Yes, in a nutshell, sis would pay the stamp duty.

G_M

SandraX wrote: »

Yes, in a nutshell, sis would pay the stamp duty.

???

Not if Flim is buying from sister!

(hmmm, also not if the buyer sells their other property, which is their main home at present, at the same time. Or within 3 years in which case they pay but can reclaim.)

'Nutshells' are all very well, but giving advice based on multiple assumptions can lead to ending up holding the wrong kind of nuts. For example my nuts may be nothing like Tom's nuts.

Tom99

[FONT=Verdana, sans-serif]

G_M wrote: »

Tom is right though he assumes the seller is not living there. 'Nutshells' are all very well, but giving advice based on multiple assumptions can lead to ending up holding the wrong kind of nuts. For example my nuts may be nothing like Tom's nuts. .

[/FONT]
[FONT=Verdana, sans-serif]The OP did say the property is rented out and mine are coconuts.[/FONT]

SDLT_Geek

G_M wrote: »

also not if the buyer sells their other property, which is their main home at present, at the same time. Or within 3 years in which case they pay but can reclaim.

The "pay but reclaim" the extra 3% SDLT would only work if the half share is bought with the intention of the buyer living in the property as his / her only or main residence.

Flim

Hi and thanks for all the replies. Apols if not clear in OP, but to clarify....we both own our own homes that we live in. This 2nd property is shared equally between us and rented out. I read from the posts above (and thanks for the links), that if one of us wanted to sell to the other sibling then that person would then need to pay stamp duty on half the value, and also any capital gains tax assuming the property is worth more than specified during probate.

Many thanks...