Deeds and stamp duty

markelanduk

Hi all, just hoping someone can advise on the following:

My two siblings and I are on the deeds of a property gifted to us by our parents. Said property has no mortgage on it.

I am looking to purchase a house but because my name is already on the deed of another property, I do not qualify as a first time buyer. Just to compound things, my name would be on two deeds if I do purchase a property which would mean I would have to pay double stamp duty - this would equate to about £18,000 in my instance which I am not prepared to pay.

Can anyone provide any advice please? I assume that one option would be to come off the deed? I understand that I would still need to pay stamp duty for the property I would like to buy but that would be a far more reasonable sum of £7,500.

Many thanks in advance!

davidmcn

markelanduk wrote: »

I assume that one option would be to come off the deed?

Yes, that would be the guaranteed way of sorting it. Was there a good reason for that property being transferred to you in the first place? Often these were misguided attempts at avoiding Inheritance Tax or care home fees, but end up giving you a headache with stamp duty - you'd also need to check if you have a Capital Gains Tax liability.

Mojisola

markelanduk wrote: »

My two siblings and I are on the deeds of a property gifted to us by our parents.

I am looking to purchase a house but because my name is already on the deed of another property, I do not qualify as a first time buyer.

I assume that one option would be to come off the deed?

Do the sums - how much would you lose if you gave up your share of the gifted property versus how much stamp duty you would have to pay?

xylophone

My two siblings and I are on the deeds of a property gifted to us by our parents. Said property has no mortgage on it.

You mean that you are a 1/3 tenant-in-common of a property that your parents gifted to their three children? Or a joint owner?

You do not live in this property?

Your siblings do/do not live in the property?

If no owners live in the property is it currently empty/tenanted?

You say that you would "come off the deed" - you mean that you would gift your interest to your siblings?

Had you considered any capital gains liability?

markelanduk

davidmcn wrote: »

Often these were misguided attempts at avoiding Inheritance Tax or care home fees, but end up giving you a headache with stamp duty

Many thanks for your input!

Spot on! Our parents went to a solicitor in an attempt to avoid any instances of my siblings and I avoiding inheritance tax in the future on the property placed in our name. At that time, neither of my siblings thought we would be buying properties in the near future but now two of us are and we're looking at said double stamp duty.

I did hear that I could come off the deed and place a charge against the property but to be honest, I'm not sure whether that is correct.

Mojisola

markelanduk wrote: »

Spot on! Our parents went to a solicitor in an attempt to avoid any instances of my siblings and I avoiding inheritance tax in the future on the property placed in our name.

But maybe having to pay Capital Gains Tax instead.

Do your parents live in the property?

markelanduk

xylophone wrote: »

You mean that you are a 1/3 tenant-in-common of a property that your parents gifted to their three children? Or a joint owner?

My grandmother initially owned the property. When she died, this was signed over to my parents. In an attempt to avoid my siblings and I paying 40% inheritance tax in the future, my parents removed their names from the deed and placed my siblings and I on it.

You do not live in this property?

I currently rent the property in question from my parents.

Your siblings do/do not live in the property?

Correct. They live in other properties. One though is looking to purchase a property soon.
If no owners live in the property is it currently empty/tenanted?

You say that you would "come off the deed" - you mean that you would gift your interest to your siblings?

Being naive to the world of deeds, I would assume that my siblings would ensure that I receive a third of the property as and when my parents consent to it being sold. I certainly wouldn't be prepared to forfeit my share. Fortunately, my siblings and I have a good relationship so I have no concern as to them being duplicitous.

Had you considered any capital gains liability?
Being naive, I have no idea what this would involve.

Many thanks for your input!

markelanduk

Mojisola wrote: »

But maybe having to pay Capital Gains Tax instead.

Do your parents live in the property?

Thanks for your input!

I currently live in the property in question and rent it from my parents. They live in a separate property.

It is possible that they may want to move into the property in question as and when they can no longer manage to maintain their current property.

Any idea when capital gains tax would apply and how it's calculated?

Mojisola

markelanduk wrote: »

I currently live in the property in question and rent it from my parents.

How can you rent it from them when you own it?

As you live in the property, CGT isn't an issue.

00ec25

markelanduk wrote: »

I did hear that I could come off the deed and place a charge against the property but to be honest, I'm not sure whether that is correct.

I assume you heard that down the pub? "a charge" means you retain a beneficial interest in the value of the property

markelanduk

00ec25 wrote: »

I assume you heard that down the pub? "a charge" means you retain a beneficial interest in the value of the property

Hah! Yeah something like that.

I was hoping that the scenario would go something like this - myself and my sibling who also wants to buy a property will come off the deed, leaving just the one sibling on the deed.

The two of us coming off would request a charge on the property which would entitle us to a third each.

Not sure if reality plays out like that though.

I did read that Boris is looking to abolish stamp duty for buyers which could come into effect as early as September. Here's hoping!