Advice Please

mybrothersbrther

Hi Everyone
Myself and my brother have inherited our parents property which has an equity release mortgage on it.
We have decided to take out a BTL mortgage along with some of our own money to pay off the equity release.(very high interest rate)
The solicitor acting on our behalf has said that we might have to pay stamp duty on the value of the equity release?
I have spoken to the tax department and they have said that's not the case, after telling our solicitor they have said they would require it in writing from the tax.
Just wondering if anybody has had a similar issue.
The equity release amounts to around £108,000 .
Thanks in advance.

Keep_pedalling

If by tax department you mean you have spoken to someone on a HMRC helpdesk, is is not unknow for the to get things wrong. You may be better off asking this on the housing board.

Yorkshireman99

mybrothersbrther wrote: »

Hi Everyone
Myself and my brother have inherited our parents property which has an equity release mortgage on it.
We have decided to take out a BTL mortgage along with some of our own money to pay off the equity release.(very high interest rate)
The solicitor acting on our behalf has said that we might have to pay stamp duty on the value of the equity release?
I have spoken to the tax department and they have said that's not the case, after telling our solicitor they have said they would require it in writing from the tax.
Just wondering if anybody has had a similar issue.
The equity release amounts to around £108,000 .
Thanks in advance.

Write formally to HMR&C. Relying on forum advice alone is foolish.

mybrothersbrther

Thanks for the replies, I have spoken to someone at the Stamp Taxes Helpline who informed me thst we would not be liable for any Stamp Duty.
Yorkshireman with the ever growing number of people finding out that their parents have taken out Equity Release once passed away I thought there maybe people on the forum that have gone through the same process.

Yorkshireman99

mybrothersbrther wrote: »

Thanks for the replies, I have spoken to someone at the Stamp Taxes Helpline who informed me thst we would not be liable for any Stamp Duty.
Yorkshireman with the ever growing number of people finding out that their parents have taken out Equity Release once passed away I thought there maybe people on the forum that have gone through the same process.

That is all very well. However, a statement from a call centre operative or a forum is no basis to take a decision. That is why you should do as I suggested.

Keep_pedalling

mybrothersbrther wrote: »

I thought there maybe people on the forum that have gone through the same process.

I think the vast majority of us would never want to become accidental landlords and would sell up in these circumstances.

SDLT_Geek

Someone who remortgages their property is not acquiring a chargeable interest. This is not an occasion where SDLT is due. https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm00320

Where a property interest is acquired is on the passing of the interest from the personal representatives to the beneficiaries. The secured debt should not count as chargeable consideration: https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm00570

Sea_Shell

Keep_pedalling wrote: »

I think the vast majority of us would never want to become accidental landlords and would sell up in these circumstances.

I agree. Do you both really want to be landlords? Is this the ideal property to have as a BTL, as in, you'd have carefully chosen and bought this property precisely for that reason if it hadn't been inherited?

It it were me, i'd sell up, pay off the debt and split the equity.

Keep_pedalling

SDLT_Geek wrote: »

Someone who remortgages their property is not acquiring a chargeable interest. This is not an occasion where SDLT is due. https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm00320

Where a property interest is acquired is on the passing of the interest from the personal representatives to the beneficiaries. The secured debt should not count as chargeable consideration: https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm00570

Makes sense, the equity company do not own part of the house they simply have a charge against it.

Dox

Yorkshireman99 wrote: »

That is all very well. However, a statement from a call centre operative or a forum is no basis to take a decision. That is why you should do as I suggested.

See post 7. Happily others are better informed and do know the answer - with the relevant referencer.

Yorkshireman99

Dox wrote: »

See post 7. Happily others are better informed and do know the answer - with the relevant referencer.

My post was in response to post number 4 before post number 7. Do you really expect me to predict future posts? My comment is still very valid as a general rule. It seems all you do is make snide comments. Added to my ignore list.