First time stamp duty.

_Steve_

Good evening all wondered if I could draw on your collective knowledge please.

I have lived with my good lady in her house for 22 years we are not married.
We have decided to move and have found a property we both like, to fund the purchase of the £280000 property I have a mortgage in my name alone for £199000 and my partner is gifting the remaining £81000.
We have been told by our solicitor that we may still have to pay stamp duty even though its my first property purchase because my partner already owns the house we live in at the moment.
She intends to sell our current home once we are settled in our new home if all goes ahead.

We are also intending to both do wills and a declaration of trust for my partner for the money she has put in just in case we broke up she would get the percentage back she put in.

Has anyone else been in this situation that could offer some insight please.

[Deleted User]

_Steve_ said:

Good evening all wondered if I could draw on your collective knowledge please.

I have lived with my good lady in her house for 22 years we are not married.
We have decided to move and have found a property we both like, to fund the purchase of the £280000 property I have a mortgage in my name alone for £199000 and my partner is gifting the remaining £81000.
We have been told by our solicitor that we may still have to pay stamp duty even though its my first property purchase because my partner already owns the house we live in at the moment.
She intends to sell our current home once we are settled in our new home if all goes ahead.

We are also intending to both do wills and a declaration of trust for my partner for the money she has put in just in case we broke up she would get the percentage back she put in.

Has anyone else been in this situation that could offer some insight please.

You say stamp duty so I’m assuming this is in England where Stamp Duty Land Tax (SDLT) is applicable. SDLT is based on beneficial ownership not legal ownership. If your partner is contributing £81,000 towards the purchase of the new property then she will be a beneficial owner of the new property. She is not gifting you that money because a) there will be a deed of trust declaring that £81,000 belongs to her and b) she is only contributing that £81,000 on the condition she gets to live in the new property. 

As you will both be beneficial owners you will not get the FTB SDLT relief because she will not meet the eligibility criteria. If she still owns the current home when the new home is purchased the higher rate of SDLT, an extra 3%, will apply to the purchase. If the current home is sold within 3 years of the purchase of the new home the higher rate can be reclaimed. 

Instead of trying to be smart with this £81,000 gift-that’s-not-actually-a-gift you might as well buy the new property jointly together as both legal and beneficial owners because the SDLT result will be the same. 

SDLT_Geek

I agree entirely with @Lover_of_Lycra What is put forwards as a "gift" clearly is not a gift!