Stamp duty question

whenisayjump

Hello,

Hopefully someone might know the answer to my question. I've tried Googling around the subject, but I suspect I'm not using the correct formulation of words to find someone else asking a similar question.

Some years ago my friend and I bought a property together, was each own 50% as 'tenants in common'. When our fixed rate mortgage period ends my partner would like to buy my friend out so we he and I would own the house together.

Would my partner need to pay stamp-duty on 100% of the property value, or would he need to pay stamp-duty on the 50% of the property he is purchasing?

He has never owned a property before, this would be his only property.

Thanks :beer:

foxy-stoat

The SDLT would be based on the amount your friend actually pays for their share of the property.

whenisayjump

Thank you for your reply.

So my understanding is that if the house is say worth 400k the amount due would be on the 200k being paid.

So £1500 (on the 200k), rather than £10,000 (on the 400k)?

Thanks

G_M

He should bear in mind he'll lose his FTB status for any future purchase.


And the friend who's selling may have Capital Gains Tax to pay unless the property has been his main home.


Do you and/or friend live there? Or is it empty/let out?


By 'partner' I asume you mean not married. If not and you own another property, there may be additional 2nd property SDLT.

whenisayjump

He should bear in mind he'll lose his FTB status for any future purchase.

Yes indeed. The property would be our only property and intended to live in, and I believe this would be the case for any FTB purchasing with a non FTB.

And the friend who's selling may have Capital Gains Tax to pay unless the property has been his main home.

That's certainly something I'll mention to him. He doesn't currently live in the property, he moved out to live with his partner (who owns another house). He only owns the one house that we own together. I'm sure his solicitor will ensure he pays anything owed when the time comes.

Do you and/or friend live there? Or is it empty/let out?

I live in the property currently with my partner. My friend lives in a different property with his partner.

By 'partner' I asume you mean not married. If not and you own another property, there may be additional 2nd property SDLT.

That's correct, we are not married. I only own the one property that I own jointly with my friend.

SDLT_Geek

It is worth taking care on how your partner’s acquisition is documented so it is clear that your partner alone is the “purchaser”. First time buyers’ relief would not be due if you were a joint buyer.

HMRC have some odd views here. It would be best to avoid documenting it using form TR1 with the transferor as your friend and you and the transferee as you and your partner. That could suggest both of you are purchasers. Daft as it seems!