Stamp Duty query

Amy2611

Wonder if anyone can advide on my situation. My husband and I divorced. We own the family home, with a very small mortgage. I moved into rented accommodation. The children split their time between us. We don't want to sell at the moment as the mortgage is so low it would be silly too. Together we can get another mortgage so we could purchase a second property for me to live in rather than continue to rent. We woukd both therefore only have one residence. Is there anyway this would stop us having tobpay stamp duty on the second property? Thanks 

AdrianC

Amy2611 said:

Wonder if anyone can advide on my situation. My husband and I divorced. We own the family home, with a very small mortgage. I moved into rented accommodation. The children split their time between us. We don't want to sell at the moment as the mortgage is so low it would be silly too. Together we can get another mortgage so we could purchase a second property for me to live in rather than continue to rent. We woukd both therefore only have one residence. Is there anyway this would stop us having tobpay stamp duty on the second property?

So you and your ex would still jointly own property A, and would jointly buy property B?
No, that would be an additional property for each of you - +3%.

Surely it would make far more sense for him to retain A in his sole ownership, and you to buy B in your sole ownership (assuming that's affordable)? Your share of A would form part of the divorce financial settlement.

grumiofoundation

Sounds to me from the info provided that after buying the second property you would (both) then own 2 properties (since you both still jointly own current property), therefore the +3% SDLT surcharge would apply (on top of the normal stamp duty).

Is ex-husband living in current property?

If you are able between you to support 2 mortgages* between you could he not buy you out of current property, and then you buy second property yourself? You would then not have to pay the +3% SDLT. 

*How easy would it be to get a mortgage with ex-husband at a property he won't live in? 

Amy2611

Already have a mortgage in principle based on our circumstances.  I earn a fair bit more which means it would be affordable for me and not him. Everything is completely amicable and I don't want to leave him in a position where he doesn't have home security. Added to that we have 4 children that I wouldn't do that to them either. I had expected and allowed for the stamp duty in affordability but just wondered if there was a loop hole at all. 

[Deleted User]

Amy2611 said:

Already have a mortgage in principle based on our circumstances.  I earn a fair bit more which means it would be affordable for me and not him. Everything is completely amicable and I don't want to leave him in a position where he doesn't have home security. Added to that we have 4 children that I wouldn't do that to them either. I had expected and allowed for the stamp duty in affordability but just wondered if there was a loop hole at all. 

Is there a Mesher Order in place? If there is then I think the former marital home would be discounted for the purposes of SDLT if you buy the new property without your ex-husband. Hopefully @SDLT_Geek can confirm. 

SDLT_Geek

Lover_of_Lycra said:

Amy2611 said:

Already have a mortgage in principle based on our circumstances.  I earn a fair bit more which means it would be affordable for me and not him. Everything is completely amicable and I don't want to leave him in a position where he doesn't have home security. Added to that we have 4 children that I wouldn't do that to them either. I had expected and allowed for the stamp duty in affordability but just wondered if there was a loop hole at all. 

Is there a Mesher Order in place? If there is then I think the former marital home would be discounted for the purposes of SDLT if you buy the new property without your ex-husband. Hopefully @SDLT_Geek can confirm. 

Yes, that sounds right.  As @Lover_of_Lycra says, this kind of "property adjustment order" would only help if OP is the only buyer of the new property.  There is some guidance here: https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm09797