Want to help my sister buy a house with a small equity stake, will it affect my future SDLT rates?

poolboy

Edit, dissolved not resolved.

davidmcn

poolboy said:

Edit, dissolved not resolved.

Discharged, not dissolved

The main problem is going to be whether the mortgage lender approves the source of funds coming from a third party, and it being a loan rather than a gift.

SDLT_Geek

poolboy said:

Yes take out a charge on your sisters property to the value of the gift, it will be registered on the deeds and you will be after the mortgage lender.  Be very specific at the outset with yr sister how, when and how much will be repaid.  I had a similar charge once and nothing was agreed.  It really protects your gift in case your sister separates from her partner, your gift is protected by a charge. On property sale the charge is paid off, I think it's called resolved.

So not a gift at all then, a secured loan?

AdrianC

poolboy said:

Yes take out a charge on your sisters property to the value of the loan gift, it will be registered on the deeds and you will be after the mortgage lender.  Be very specific at the outset with yr sister how, when and how much will be repaid.  I had a similar charge once and nothing was agreed.  It really protects your loan gift in case your sister separates from her partner, your loan gift is protected by a charge. On property sale the charge is paid off, I think it's called resolved.

If it's a gift, the money is hers - you have no future call over it at all, so there's nothing to protect with a charge.

If a charge protects it and gets it returned to you in the future - it was a loan.

justworriedabit

OP, looks as though your questions have been comprehensively addressed and I wish you all the best.

Slightly of track bit stamp duty related and joint ownership etc. 

What is 4 individuals were to buy a property for 400k, it was a 2nd property for all as all had a main  property.  Silly question but one I'm not really understanding -  will the stamp duty be split 4 ways or my silly question all 4 pay the full stamp on 400k each. Many thanks in advance. 

poolboy

Discharged, thanks i was close.

Yes you are all correct it won't be a gift if it is secured by a charge for repayment.

Thanks all

SDLT_Geek

justworriedabit said:

Slightly of track bit stamp duty related and joint ownership etc. 

What is 4 individuals were to buy a property for 400k, it was a 2nd property for all as all had a main  property.  Silly question but one I'm not really understanding -  will the stamp duty be split 4 ways or my silly question all 4 pay the full stamp on 400k each. Many thanks in advance. 

If four people buy a property and the 3% extra SDLT applies, then the extra 3% applies "once" to the whole of the price.  The four buyers are jointly and severally liable to HMRC for all of the SDLT on the purchase.  It is up to the owners to agree between themselves how it is funded.

justworriedabit

SDLT_Geek said:

justworriedabit said:

Slightly of track bit stamp duty related and joint ownership etc. 

What is 4 individuals were to buy a property for 400k, it was a 2nd property for all as all had a main  property.  Silly question but one I'm not really understanding -  will the stamp duty be split 4 ways or my silly question all 4 pay the full stamp on 400k each. Many thanks in advance. 

If four people buy a property and the 3% extra SDLT applies, then the extra 3% applies "once" to the whole of the price.  The four buyers are jointly and severally liable to HMRC for all of the SDLT on the purchase.  It is up to the owners to agree between themselves how it is funded.

Thank you. To be clear, the 400k property bought by 4 separate people together, total stamp would be standard rate plus 3% = 12k before the stamp hols.  Therefore, no one has to pay the 3% on the 400k k each? Thanks again.

davidmcn

justworriedabit said:

SDLT_Geek said:

justworriedabit said:

Slightly of track bit stamp duty related and joint ownership etc. 

What is 4 individuals were to buy a property for 400k, it was a 2nd property for all as all had a main  property.  Silly question but one I'm not really understanding -  will the stamp duty be split 4 ways or my silly question all 4 pay the full stamp on 400k each. Many thanks in advance. 

If four people buy a property and the 3% extra SDLT applies, then the extra 3% applies "once" to the whole of the price.  The four buyers are jointly and severally liable to HMRC for all of the SDLT on the purchase.  It is up to the owners to agree between themselves how it is funded.

Thank you. To be clear, the 400k property bought by 4 separate people together, total stamp would be standard rate plus 3% = 12k before the stamp hols.  Therefore, no one has to pay the 3% on the 400k k each? Thanks again.

Correct, in the same way that a couple doesn't have to pay double the stamp duty of a single buyer...

SDLT_Geek

Yes, I agree with @davidmcn