Shared ownership sale! Help!

Kylie_R

ResourcesShared said:

HMRC publish guidance on shared ownership and stamp duty land tax. Apparently I haven't been on here for long enough to post a link, but you should be able to find it by Googling.... Hope it's helpful.

Thanks I’ve tried to Google it but I’m getting so confused! 

Can you post the link without the www at the beginning as I believe that works - thank you

Slithery

https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm27000

SDLT_Geek

Kylie_R said:

Hello, 

sorry this has probably been asked 100000% times.

I bought my house in 2019 as a first time buyer. The full value was £290000. I bought a 50% share for £145000. As a first time buyer I did not pay any stamp duty.

I now want to sell my house and they people who want to buy it are full Ownership buyers. The RICS surveyor valued it at £350000 and they offered and I accepted £360000 (this is what the estate agent said to put it on for).

From them to buy the property I need to simultaneously staircase and sell at the same time. However, I didn’t even consider stamp duty until today and I have no idea how much I’ll have to pay if anything. I have read conflicting information about a sub-relief payment which means I don’t pay any stamp duty when I staircase and sell but at the same time I also have read that I will have to pay stamp duty when I staircase and then the buyers from me will have to pay another lot of stamp duty? 

Will I have to pay stamp duty? If so how much is it likely to be? Will it be on the full £360,000 or half of the £350,000? 

Sorry I’m so confused about this whole selling thing! 

Any help greatly received!

thank you 🙏🏼🙏🏼

My view is that a form of sub sale relief (now called pre completion transaction relief) could apply to you if staircasing out means the freehold is transferred to you. That is because you can then sell on the same interest you acquire, which is a condition of the relief.

SDLT_Geek

I have heard since that HMRC will give clearances to SDLT sub sale relief applying where there is a back to back staircasing out to 100% and onwards sale, even where the freehold is not acquired. 

So for example if V with a lease at 50% staircases out to 100% and at the same time transfers the lease to their buyer P, then V should be able to get a clearance that no SDLT is due on the staircasing out.

RBC_SE1

SDLT_Geek said:

I have heard since that HMRC will give clearances to SDLT sub sale relief applying where there is a back to back staircasing out to 100% and onwards sale, even where the freehold is not acquired. 

So for example if V with a lease at 50% staircases out to 100% and at the same time transfers the lease to their buyer P, then V should be able to get a clearance that no SDLT is due on the staircasing out.

Hi - do you have a source for this please - thank you!

SDLT_Geek

RBC_SE1 said:

SDLT_Geek said:

I have heard since that HMRC will give clearances to SDLT sub sale relief applying where there is a back to back staircasing out to 100% and onwards sale, even where the freehold is not acquired. 

So for example if V with a lease at 50% staircases out to 100% and at the same time transfers the lease to their buyer P, then V should be able to get a clearance that no SDLT is due on the staircasing out.

Hi - do you have a source for this please - thank you!

Anecdotal information from other professionals mostly.  

I am not aware of anything official published by HMRC on this.

Kylie_R

SDLT_Geek said:

I have heard since that HMRC will give clearances to SDLT sub sale relief applying where there is a back to back staircasing out to 100% and onwards sale, even where the freehold is not acquired. 

So for example if V with a lease at 50% staircases out to 100% and at the same time transfers the lease to their buyer P, then V should be able to get a clearance that no SDLT is due on the staircasing out.

Oooh that’s great thank you! I will ask my solicitor to check it out. The freehold is being acquired by the new buyer. I am also selling and simultaneously staircasing. Where did you hear this please? 

SDLT_Geek

HMRC have now confirmed in a meeting that "Pre-completion transaction relief can apply on a back to back staircasing and sale on (provided the other conditions for relief are met).  It is no objection that (for SDLT purposes) a share in the property is acquired and the whole of the lease is assigned onwards.  The embedded right in the lease to staircase provides the necessary contract to acquire a share.  HMRC have given clearances to confirm that PCT relief is available, but have not published their view." 

HMRC say that they are planning to issue guidance to confirm their view.

sdm1985

Good evening,

I have just learned of this a few days ago and not sure if it applies to me and if my solicitor got it wrong?

Sold in November 2021
Shared ownership 30% share, sold on the open market, to sell I did back-to-back stair-casing to 100% and simultaneous sale and paid £6k in SDLT.

Can I make a claim for this? When was the guidance introduced?

Thanks in advance.

sdm1985

SDLT_Geek said:

I have heard since that HMRC will give clearances to SDLT sub sale relief applying where there is a back to back staircasing out to 100% and onwards sale, even where the freehold is not acquired. 

So for example if V with a lease at 50% staircases out to 100% and at the same time transfers the lease to their buyer P, then V should be able to get a clearance that no SDLT is due on the staircasing out.

I think this applies to me, but I sold in December 2021 and only just learned of this now. I paid £6k+ in SDLT.