Stamp Duty on family owned house

MJD123

Assume that we are out of the stamp duty break as nothing is likely to happen until after October 2021 and this is in England.

When my father died some years back he left his half of my parent's home to my brother and I. My mother retained her half of the property and can live in the house for as long as she wants/needs to. It is my understanding that if at any point she wishes to move then the same arrangements would apply to the new house - for ease let's assume that the value of the new house is the same as the current house - lets say £300K - the old house would be sold and the new house bought - half of the house would be owned by our mother and the other half would be owned in equal quarter shares by my brother and I, and our mother would again be able to live there for as long as she needs/wants.

My wife and I already own our own house.
My brother rents a house and has never owned a house (other than having a quarter share in our parents house as above)

My question is - how would this pan out for stamp duty?
Would my mother be liable for the whole lot?
Would I be hit with a tax bill as a 'second home' and at an increased rate?
Would my brother be hit with a tax bill?

SDLT_Geek

It will be important to know whether under the terms of the Will your father's part was left to you and your brother:

(a) Outright, so your mother's entitlement to live there derives from her half share.

(b) On a formal trust, so your mother has a "right for life" in respect of your father's half share, with you and your brother having a right "in remainder".

MJD123

SDLT_Geek said:

It will be important to know whether under the terms of the Will your father's part was left to you and your brother:

(a) Outright, so your mother's entitlement to live there derives from her half share.

(b) On a formal trust, so your mother has a "right for life" in respect of your father's half share, with you and your brother having a right "in remainder".

Thanks for your response - looking at the will there is a lot of mention of 'TRUST' and so I am opting for (b)

SDLT_Geek

If the part left by your father is held in trust, with a right under the trust for your mother to live in the property for life, then whether the 3% extra will apply to the purchase will depend on her circumstances; not those of you and your brother.  See the guidance here: https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm09835  On that basis it seems likely that the extra 3% SDLT will not apply.  
 
SDLT on £300,000 for a purchase completing by 30 September without the extra 3% is £2,500.  The SDLT is the joint responsibility of all of the buyers.

AdrianC

MJD123 said:

SDLT_Geek said:

It will be important to know whether under the terms of the Will your father's part was left to you and your brother:

(a) Outright, so your mother's entitlement to live there derives from her half share.

(b) On a formal trust, so your mother has a "right for life" in respect of your father's half share, with you and your brother having a right "in remainder".

Thanks for your response - looking at the will there is a lot of mention of 'TRUST' and so I am opting for (b)

What is the precise wording in the will? Redact the names and address, of course.