Stamp duty on transfer of equity

happyapples

My partner and I are splitting up. I am going to be staying in the house and taking on the mortgage and the equity will be transferred to me solely. We have a buy to let which he wi take on solely. 
The property is valued at 430k and the mortgage is 110k. We have a Deed of trust that divides the property 34/66% with him owning 34%.  As I will be receiving the 34% will I need to pay stamp duty?
Any advice would be really appreciated. 

SDLT_Geek

happyapples said:

My partner and I are splitting up. I am going to be staying in the house and taking on the mortgage and the equity will be transferred to me solely. We have a buy to let which he wi take on solely. 
The property is valued at 430k and the mortgage is 110k. We have a Deed of trust that divides the property 34/66% with him owning 34%.  As I will be receiving the 34% will I need to pay stamp duty?
Any advice would be really appreciated. 

It will make a difference if you are either married or in a civil partnership.  Are either of those the case?

Is the property in England?

happyapples

No. Just partners 18years

happyapples

Yes in England. 

SDLT_Geek

I expect your conveyancer will be able to help.  It might be possible to structure the division as a "partition" of the two properties. This should leave the only "chargeable consideration" as a proportion of the loan.  This should be low enough that there should be no SDLT to pay.

happyapples

I have been asked by my solicitor to get worse case scenario.
I believe its based on 50% of mortgage outstanding = 55,000
plus share of equity being received  34% of 320k
= 108,800

108,800
+55,000
=163,800   

Using purchase price of 163,800 on stamp duty calculator gives tamp duty payable of £776
This is very different if I use the whole amount of 430k purchase price =£11,500. So want to check I'm calculating correctly in the circumstances of transfer of equity only. Thank you 🙏🤞😁

SDLT_Geek

happyapples said:

I have been asked by my solicitor to get worse case scenario.
I believe its based on 50% of mortgage outstanding = 55,000
plus share of equity being received  34% of 320k
= 108,800

108,800
+55,000
=163,800   

Using purchase price of 163,800 on stamp duty calculator gives tamp duty payable of £776
This is very different if I use the whole amount of 430k purchase price =£11,500. So want to check I'm calculating correctly in the circumstances of transfer of equity only. Thank you 🙏🤞😁

Your solicitor should surely be advising you, not the other way around!

I would expect the % of the mortgage debt to take into account to equal the % share in the property acquired, not 50%.

happyapples

They are dealing with the family side of things and I'm trying to keep costs at a minimum where possible. The % split of equity was due to me putting the whole deposit down (effectively 1/3 of the purchase price) so the mortgage for the remaining 2/3 was split equally and a deed of trust was drawn up which should have reflected this. (unfortunately they omitted to protect the deposit from the equity split so he will be legally entitled to benefit from 1/3 of the 75k deposit) 

happyapples

Any advice with those specific details would be greatly appreciated. Surely I won't pay the 11k?