Stamp Duty Land Tax on Staircasing

rm01lp

I’ve tried without success to find out how much Stamp Duty Land Tax I will need to pay when I staircase to 100% on my Shared Ownership House.

My situation is as follows:

I purchased my 50% share in 2003 for £72,500 and paid stamp duty on this amount which was £725.00 (1%). The full market price in 2003 was £145,000.

I now want to purchase the remaining 50%, and the current full market valuation has come in at £280,000. So, to do this I need to pay the Housing Association £140,000 to get 100% ownership.

Different conveyancing solicitors have given me differing figures on what stamp duty will become payable on completion to 100%. I’ve looked at the HMRC website which just confused me further as none of their examples fit may situation.
Can anyone help?

SDLT_Geek

When you bought in 2003 you
(a) paid the social landlord for a new lease? or
(b) bought the lease from someone else who already had the lease?
It makes a difference to the calculation.

rm01lp

We bought the lease from someone else.

SDLT_Geek

I make the SDLT £300. It is calculated as 2% of the excess over £125,000.

The normal complex rules about linked transactions for staircasing do not apply. That is because the 2003 transaction when you bought the lease was from a seller who is not a “connected person” to the social landlord who you pay for the staircasing. I do not think the HMRC guidance covers this situation.

rm01lp

Thank you so much for your reply, it makes complete sense.

rm01lp

Thanks for the advice again. Just out of interest do know if there is anything online where the rules which affect my situation might be? I'm just pre-empting having to provide something as the 3 conveyancing solicitors I've contacted say something different to each other - which is a little worrying!

SDLT_Geek

There is some HMRC guidance here: https://www.gov.uk/guidance/sdlt-shared-ownership-property and from the pages indexed here: https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm27000 but I do not recall anything that exactly matches your circumstances.
You could refer your conveyancers to the linked transaction rules in Finance Act 2003 section 108. You can say the two transactions cannot be linked because the two “vendors” are not “connected persons”.