Shared Ownership SDLT query - first share bought 2006

Mallku

Hi,


Looking for some help in understanding exactly what I would owe for SDLT as gov.uk guidance doesn't appear to cover my situation and HMRC helpline useless in providing answers.



My situation is that I originally purchased a 25% share in my flat (re-sale property) in June 2006 paying £58,750 (valued at £235k). I subsequently purchased a further 55% share in May 2014 paying £154,000 (valued at £280k). I am now looking potentially to buy the remaining 20% for a further £80,000 (valuation done at £400k). I have not paid any stamp duty land tax to date as my ownership is only up to 80% but I know I will need to pay once I own over 80%.


My understanding of SDLT due if I pay the £80,000 for remaining 20% is that it would be:


£58,750 + £154,000 + £80,000 = £292,750 (total paid for the property)

£292,750 is £42,750 that is above the £250k threshold so £42,750 * 5% = £2137.5
£125,000 at 2% for the amount between £125k and £250k = £2,500
This totals = £4,638 (£2137.5 + £2500)

apportioned at £80,000 / £292,750 = 0.27327
Meaning SDLT payable at £4,638 * 0.27327 = £1267


If I've got this right great. What I then don't understand is the implication of buying the first share (of a re-sale property) prior to 2008 as I can't see examples of this on the gov.uk website. I've tried reading examples and the SDLT manual but can't see clearly what further if any SDLT I may need to pay.


I am assuming the lease premium doesn't apply to me as I bought a share in a re-sale property and took on an existing lease but this may not be correct (?)


I understand from the lease (which started in 2004) that the market election paragraph in this (paragraph 11) was crossed through by hand so I believe the first purchaser who I bought the 25% share from did not elect to pay SDLT at the time so I am liable for paying in stages.



Given my first purchase was made in June 2006, would I be due to pay any SDLT on this transaction? This is the bit I'm not clear on and am not sure how much I might need to budget for.



Any help in clarifying my understanding of what SDLT I will need to pay would be greatly appreciated.


Thanks in advance.

SDLT_Geek

It is likely to be better than you think. As in 2006 you bought from an existing leaseholder (not from the RSL) that transaction should not be linked to the later ones. So you could leave the £58,750 out of the calculations.

The payments by linked transactions from the RSL are £154,000 to get to 80% and £80,000 to get to 100%. That totals £234,000.

SDLT on £234,000 at standard rates is £2,180.

The fraction you pay is £80,000 / £234,000. That fraction of £2,180 gives SDLT due of £745.

Your conveyancer should be able to confirm this.

Mallku

Thank you SDLT Geek for your clear help, that's brilliant. I certainly didn't know the linking of transactions depended on who I had bought from. It's good news on it being less than I had thought and I will confirm with my conveyancer on the exact amount as you mention.