Can a third party pay SDLT or does it have to come from us

greensalad

My mother has offered to pay our SDLT for when we buy a house, hopefully this summer.

As I understand it we'll have to prove the funds are available for the mortgage offer to complete, but does it have to be in our names?

If she is able to pay it on our behalf, how does that factor into inheritance tax laws? Fingers crossed of course as my Mum is still in her late 50s but you never know.

Would it just be easier for her to transfer the cash to us when it's required? 

davidmcn

I doubt anybody will care who is paying the fees or when she transfers it to you, though some solicitors will want to treat all incoming funds in the same way for anti-money-laundering purposes, so she may need to provide ID/bank statements to prove whose money it is.

I can't see Inheritance Tax being relevant. Giving you the money is no "worse" for IHT purposes than her keeping it. At worst it gets (at least partially) taken into account if she dies within 7 years.

princeofpounds

What davidmcn said.

IHT is unlikely to be a problem unless a) she is very wealthy and b) she dies within 7 years.

It's better than you discuss this with your solicitor. They will be the ones who organise stamp duty for you (not necessarily, but doesn't make sense to do it any other way), so the money will need to hit their account, not HMRC directly.

It doesn't really matter if the money goes to you, then to the solicitor, or direct to the solicitor. But the solicitor will want to be aware of the source of funds so they get the chance to perform AML checks and confirm it is a gift. 

davidmcn

princeofpounds said:

the solicitor will want to be aware of the source of funds so they get the chance to perform AML checks and confirm it is a gift. 

In principle that shouldn't matter, what would be of concern is any part of the price coming from a third party (particularly if it isn't a gift which the mortgage lender has approved).

Irishpearce26

Firstly if you are a first time buyer you wont pay SDLT up to £300k so there may not be a need as I see from your signature you are saving for a deposit?

greensalad

Irishpearce26 said:

Firstly if you are a first time buyer you wont pay SDLT up to £300k so there may not be a need as I see from your signature you are saving for a deposit?

We've been approved for a mortgage at a price over £300k.

princeofpounds

davidmcn said:

princeofpounds said:

the solicitor will want to be aware of the source of funds so they get the chance to perform AML checks and confirm it is a gift. 

In principle that shouldn't matter, what would be of concern is any part of the price coming from a third party (particularly if it isn't a gift which the mortgage lender has approved).

Yeah possibly not, but I still suspect it's something they might want to do. They money is essentially all fungible anyway and the mortgage company don't want there to be a concealed loan that would affect the ability of the occupants to make repayments, even if it's not been used to buy the property itself.