NOT Able to Claim Stamp Duty Holiday Benefit due to Name on Land Registry of Parents House in Will

SevenIron

Hi Guys, Hope you all had a good Christmas. I am going through house sell and purchase right now. My solicitor has told me I will need to pay the Stamp Duty because my name appears on the land register of my parents house, my names on there because of a Will arrangment made by parents to be acted on when they pass on, my wifes name is on the land registery of her Mother in Laws house and was added when her Dad passed away. We only stand to benefit from either property when my parents or my wifes Mother In Law pass on. It dosn't seem right that I have to pay the stamp duty as I cant ocuppy either of the other properties were mentioned on as these only become an assett when someone dies. Has anyone had any similar experiences of this or can unpick the detail of elegibility to the stamp duty exemption? Any help appreciated.

TonyMMM

A will comes into effect when someone dies, it doesn't change the house ownership in advance.

It sounds more likely that at the the time their wills were made, you were added as a part/joint owner of their property, probably as part of some plan to avoid/reduce IHT or care home fees. You need to establish exactly what did happen - you would have had to sign paperwork as part of the process. 

greatcrested

It sounds like the family either received poor advice, or made their wills themselves without fully understanding the implications.

There was probably some attempt here to reduce Inheritance Tax, but whatever, the fact remains that you part-own a property so are not a FTB.

Win some, lose some. Perhaps on your parents' deaths you will recoup the loss via reduced IHT.

lisyloo

It sounds like this was done to avoid IHT and now you’ve found out that you can’t do both.
is it possible to remove your names from the houses concerned? Obviously that will take time and may cause delays.

steampowered

As you own part of your parent's property, and you are now buying a second property, you will have to pay higher rate stamp duty.

Are you selling a property which is your main residence and replacing your main residence? If so, there is an exemption for that.

It might be better for you to transfer your stake in your parent's property back to your parents. You will then no longer be the owner of two properties.

saajan_12

SevenIron said:

Hi Guys, Hope you all had a good Christmas. I am going through house sell and purchase right now. My solicitor has told me I will need to pay the Stamp Duty -are you moving your main residence (ie selling current MR and buying a new one which you'll move into)? Then that would be an exception to the additional 3% stamp duty even if you 'own' another property. You'd always have to pay the 'normal' stamp duty regardless of additional homes, less the SDLT holiday until 31 March for the first 500k. 

because my name appears on the land register of my parents house, my names on there because of a Will arrangment made by parents to be acted on when they pass on, my wifes name is on the land registery of her Mother in Laws house and was added when her Dad passed away. We only stand to benefit from either property when my parents or my wifes Mother In Law pass on. It dosn't seem right that I have to pay the stamp duty as I cant ocuppy either of the other properties were mentioned on as these only become an assett when someone dies. - if you're just willed a property then that wouldn't be recorded on land registry now. The inheritance would be subject to IHT and you'd only OWN it after death & probate etc. To avoid the tax, you may have been gifted part / all of the property already. In that case, you do own it and the consequential SDLT implications. 
Has anyone had any similar experiences of this or can unpick the detail of elegibility to the stamp duty exemption? Any help appreciated.

I think there's some gap with the inheritance / will situation, you either own it now, per land reg, and all the implications that go with multiple home ownership, or its willed to you and the estate would have to pay any IHT / care costs applicable.

However for your immediate issue, what SDLT benefit are you expecting that you think you won't get? 
- for the normal SDLT under 500k, there's a holiday if you complete before 31March, else you'd pay this
- for the normal SDLT on the new property value over 500k, you'd pay this regardless
- for the additional 3% SDLT, even if you own the additional properties, there's an exception if all the buyers of the new place will buy it as their main residence AND they are all selling their current main residence

getmore4less

SevenIron said:

Hi Guys, Hope you all had a good Christmas. I am going through house sell and purchase right now. My solicitor has told me I will need to pay the Stamp Duty because my name appears on the land register of my parents house, my names on there because of a Will arrangment made by parents to be acted on when they pass on, my wifes name is on the land registery of her Mother in Laws house and was added when her Dad passed away. We only stand to benefit from either property when my parents or my wifes Mother In Law pass on. It dosn't seem right that I have to pay the stamp duty as I cant ocuppy either of the other properties were mentioned on as these only become an assett when someone dies. Has anyone had any similar experiences of this or can unpick the detail of elegibility to the stamp duty exemption? Any help appreciated.

starting with the wife 
If a  legal owner as trustee of an IPDI trust( ie life interest trust for the surviving parent)  then you don't have any beneficial interest in the property for any SDLT purposes.
That seem likely for your wife but does need checking.

For yourself looks to be different from what you have said,  you could still be named as a trustee and outside the SDLT but that would need clarifying as part of the what was done with your parents will that ended up with you on the title without any occupation rights

greatcrested

lisyloo said:

It sounds like this was done to avoid IHT and now you’ve found out that you can’t do both.
is it possible to remove your names from the houses concerned? Obviously that will take time and may cause delays.

I  believe this would only partially help. OP would still not be a FTB so the standard rates above £500K would apply, not the reduced FTB rates.

However it would avoid the 3% additional 2nd property SDLT.

SDLT_Geek

The key here is likely to be whether OP and spouse are selling their existing home when buying the new one.  If so,  the 3% surcharge SDLT for additional properties should not apply.

A benefit from the SDLT “holiday” should apply in any event if the purchase completes by 31 March 2021.