Second property SDLT Applicable? JMSP

dullbue

Hi,

I am currently in the process of buying a property, on a Joint Mortgage, Sole Proprietor basis, with myself being the SP. My husband is on the mortgage application to secure the funding.

He has owned a house for the last 10 years, and I am not on the deeds/mortgage, and therefore I consider myself to be a First Time Buyer.

The house I am purchasing is 505k, so the FTB Relief would not be applicable in this case... However I'm wondering if I will only have to pay basic Stamp Duty, as apposed to the 'Additional Property' one for 2nd properties, as I have no properties etc registered in my name.

Can anyone shed some light on this?
Thanks

Thrugelmir

As a married couple you are classed as a single unit by the HMRC.

kingstreet

It's "joint borrower, sole proprietor."

AFAIK a married couple cannot avoid SDLT by doing this, did you seek professional tax advice before embarking on this plan?

dullbue

Borrower/Mortgage... Same thing!
One person on the deeds. Two on the mortgage.

We did seek advice, and were told this was do-able. House price is above the FTB cut off threshold, so FTB relief not applicable, but avoiding 2nd property SD was. Hense putting myself as the sole owner.

Looking for clarification now, as solicitors are not so sure.

00ec25

you are married, he will occupy the property

therefore, for SDLT purposes, he is deemed to have a beneficial interest in the property even if he is not named as a legal owner of it.

https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm09785

In simple terms, a married couple is "one unit"

Where an individual with a spouse or civil partner purchases an interest in a dwelling and their spouse or civil partner is not a joint purchaser, the spouse or civil partner will be treated as a joint purchaser in respect of the transaction [Para 9].

https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm09820


the higher rate applies

kingstreet

dullbue wrote: »

Borrower/Mortgage... Same thing!
One person on the deeds. Two on the mortgage.

We did seek advice, and were told this was do-able. House price is above the FTB cut off threshold, so FTB relief not applicable, but avoiding 2nd property SD was. Hense putting myself as the sole owner.

Looking for clarification now, as solicitors are not so sure.

The clarification of the name for this was more for future readers of the thread where JB, SP will be more widely known; but I'd be happy to accept "Joint Mortgagors, Sole Proprietor" as a clarification.

I'm surprised it's only now your solicitor is unsure as they are the tax collector on behalf of HMRC and will usually be more conservative/cautious before they check the position with HMRC.

From whom did you seek advice which led you down this path?

SDLT_Geek

There is some HMRC guidance which explains that when one of a married couple (or of civil partners) buy a property, the other is treated as a buyer as well for the purposes of assessing whether the 3% surcharge applies. It is here: https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm09820 . It does not quite treat spouses "as a single unit", though the effect of the deemed joint buyer rule in your case has the same effect.