Transferring from FTB to avoid stamp duty

gemzizzle

Hi everyone,

My partner will be buying a house for us both to live in, but he is paying for it in cash and he will own it. However, I have never owned a property and so I would benefit from stamp duty relief as the property costs £250,000 (he has owned before). We will not get it through before the stamp duty holiday deadline, unfortunately.

Legally, would it be ok for the property to be bought in my name but him pay the money, and then I just transfer it over to him and thus avoid stamp duty?

[Deleted User]

gemzizzle said:

Hi everyone,

My partner will be buying a house for us both to live in, but he is paying for it in cash and he will own it. However, I have never owned a property and so I would benefit from stamp duty relief as the property costs £250,000 (he has owned before). We will not get it through before the stamp duty holiday deadline, unfortunately.

Legally, would it be ok for the property to be bought in my name but him pay the money, and then I just transfer it over to him and thus avoid stamp duty?

HMRC will see straight through that one. SDLT is based on beneficial ownership not legal ownership and it’s quite clear that your partner will be the beneficial if not legal owner from the get-go. 

gemzizzle

Lover_of_Lycra said:

gemzizzle said:

Hi everyone,

My partner will be buying a house for us both to live in, but he is paying for it in cash and he will own it. However, I have never owned a property and so I would benefit from stamp duty relief as the property costs £250,000 (he has owned before). We will not get it through before the stamp duty holiday deadline, unfortunately.

Legally, would it be ok for the property to be bought in my name but him pay the money, and then I just transfer it over to him and thus avoid stamp duty?

HMRC will see straight through that one. SDLT is based on beneficial ownership not legal ownership and it’s quite clear that your partner will be the beneficial if not legal owner from the get-go. 

I see, is that because the money for the house would come out of his account? Would he be able to gift me the money and then it's me paying for it? Sorry, I have no idea what's correct/legal with this as I said I'm a FTB.

[Deleted User]

gemzizzle said:

Lover_of_Lycra said:

gemzizzle said:

Hi everyone,

My partner will be buying a house for us both to live in, but he is paying for it in cash and he will own it. However, I have never owned a property and so I would benefit from stamp duty relief as the property costs £250,000 (he has owned before). We will not get it through before the stamp duty holiday deadline, unfortunately.

Legally, would it be ok for the property to be bought in my name but him pay the money, and then I just transfer it over to him and thus avoid stamp duty?

HMRC will see straight through that one. SDLT is based on beneficial ownership not legal ownership and it’s quite clear that your partner will be the beneficial if not legal owner from the get-go. 

I see, is that because the money for the house would come out of his account? Would he be able to gift me the money and then it's me paying for it? Sorry, I have no idea what's correct/legal with this as I said I'm a FTB.

HMRC aren’t stupid. He gifts you the money but only on the proviso that once you’ve bought the property you gift it straight back to him, HMRC will see straight through that. It’s not even tax avoidance (legal) it’s veering straight into tax evasion (illegal) territory. 

SpiderLegs

A very simplistic and easily spotted attempt at evasion over a 1% tax bill doesn’t sound like a worthwhile exercise to me.

saajan_12

gemzizzle said:

Lover_of_Lycra said:

gemzizzle said:

Hi everyone,

My partner will be buying a house for us both to live in, but he is paying for it in cash and he will own it. However, I have never owned a property and so I would benefit from stamp duty relief as the property costs £250,000 (he has owned before). We will not get it through before the stamp duty holiday deadline, unfortunately.

Legally, would it be ok for the property to be bought in my name but him pay the money, and then I just transfer it over to him and thus avoid stamp duty?

HMRC will see straight through that one. SDLT is based on beneficial ownership not legal ownership and it’s quite clear that your partner will be the beneficial if not legal owner from the get-go. 

I see, is that because the money for the house would come out of his account? Would he be able to gift me the money and then it's me paying for it? Sorry, I have no idea what's correct/legal with this as I said I'm a FTB.

That's the same as me gifting Tesco £1 and them gifting me a jug of milk. 
In your case, its the same as partner gifting the vendor £X and the vendor gifting partner the house. Why put you in the middle? 

Until HMRC catch on, no solicitor will touch this..
a) You buying but with money recently coming from a gift from partner, who will live there.. looks like money laundering / tax evasion,  
b) A sizeable monetary gift followed by a house transfer the other way is going to look like a sale from you to partner. 

Neil49

We are currently in the process of buying a property and one of the first questions from our solicitor was, where is the funding for the purchase coming from? If you simply show them a bank statement with a balance of £250k their next request will be for proof of where that money came from. If you say that your partner gave it to you then that will set off alarm bells with them and they will investigate further as legally required to do. 

wilfred30

If your partner was paying £249,999 for the house, there wouldn't be any stamp duty to pay so maybe he should reduce his offer.

ANewUser08

gemzizzle said:

Hi everyone,

My partner will be buying a house for us both to live in, but he is paying for it in cash and he will own it. However, I have never owned a property and so I would benefit from stamp duty relief as the property costs £250,000 (he has owned before). We will not get it through before the stamp duty holiday deadline, unfortunately.

^You've answered your own question.

gemzizzle said:

Legally, would it be ok for the property to be bought in my name but him pay the money, and then I just transfer it over to him and thus avoid stamp duty?

^Again, there's your the answer. No - it is tax evasion and blatantly obvious.

grumiofoundation

wilfred30 said:

If your partner was paying £249,999 for the house, there wouldn't be any stamp duty to pay so maybe he should reduce his offer.

Where does that come from? 

greatcrested

It's blatantly tax evasion.

I sometimes drive at 80 mph, which I aknowledge is illegal, and if caught I'll pay the price.

Are you/he willing to pay the price of being caught?

And I don't mean paying the price of the saved SDLT, I mean the price of the criminality.