Stamp duty and beneficial interesr

Brian_in_Somerset

My son is separating from his partner. The house was in her name and as they haven't yet made a financial agreement he's submitted a Form RX1 to the Land Registry to apply a restriction on it (most of the money came from his old house and savings and the mortgage was paid from a joint account). We're  being told it's not yet been dealt with by the Registry, however, and that his ex partner has until early December to challenge it. He's buying a new home but can't get a clear answer as to whether or not he has to pay higher rate stamp duty on the basis that he has a beneficial interest in his old home. I can't see that the restriction would bestow that even it had been accepted, which it apparently won't be for at least 6 weeks (and it's likely to be challenged anyway) but the conveyancer says it does. The Land Registry say they don't know and  should ask HMRC. The HMRC help-line didn't know and said I had to write in, but by the time they reply we'll probably be well past completion date on the new home. Does anybody here know? I'm a bit surprised it's so unusual a question!

SDLT_Geek

Brian_in_Somerset said:

My son is separating from his partner. The house was in her name and as they haven't yet made a financial agreement he's submitted a Form RX1 to the Land Registry to apply a restriction on it (most of the money came from his old house and savings and the mortgage was paid from a joint account). We're  being told it's not yet been dealt with by the Registry, however, and that his ex partner has until early December to challenge it.

He's buying a new home but can't get a clear answer as to whether or not he has to pay higher rate stamp duty on the basis that he has a beneficial interest in his old home. I can't see that the restriction would bestow that even it had been accepted, which it apparently won't be for at least 6 weeks (and it's likely to be challenged anyway) but the conveyancer says it does.

The Land Registry say they don't know and  should ask HMRC. The HMRC help-line didn't know and said I had to write in, but by the time they reply we'll probably be well past completion date on the new home. Does anybody here know? I'm a bit surprised it's so unusual a question!

Your son, by virtue of contributing capital to the original purchase, might well have an underlying share in the property.  That does not depend on whether or when the RX1 is registered, but on other factors.  Presumably he is saying he does have a share in the property, rather than that perhaps he gifted the money to his partner or lent it to her.

Hopefully the position will be clear from the paperwork at the time of the purchase of the house.  There might have been a "declaration of trust" drawn up to record the underlying shares.

On the basis that he has a share in the old home then it seems likely that he will have to pay the extra 3% on the new home.  (His share in the old home would be worth £40,000 or more?  That is assessed without deducting the amount of the mortgage debt.)

Brian_in_Somerset

There was no deed of trust. He is saying either that he wants half the value of the house OR the money he invested back but is being rebuffed on both counts so far. Its complicated by the fact that both sets of parents put money in, one to help buy the house but the other was later to balance that sum and compensate fir money spent on re-modelling it. She's now saying that second sum, which was from her parents, was to buy out his share of the house (although that was not said at the time and was over a year before they split!). He has lots of evidence on his side but it's worrying! 

SDLT_Geek

Brian_in_Somerset said:

There was no deed of trust. He is saying either that he wants half the value of the house OR the money he invested back but is being rebuffed on both counts so far. Its complicated by the fact that both sets of parents put money in, one to help buy the house but the other was later to balance that sum and compensate fir money spent on re-modelling it. She's now saying that second sum, which was from her parents, was to buy out his share of the house (although that was not said at the time and was over a year before they split!). He has lots of evidence on his side but it's worrying! 

I wonder why the property was bought in her name if he and his family were putting in money?  What was the background?

london21

Hopefully this gets sorted out fairly. Might be able to escalate the case with land registry. Quite sad how people change when it comes to money.

TripleH

Does she have any paperwork supporting her claim about the money her parents put in?

Do bank statements support her claims? If he had money go to him direct only then it might be harder than if they ernt to a joint account.

Does he have bank statements and access to joint account bank statements? He needs to pull together evidence to support his argument whilst he still can.