Stamp duty headache!! Help!!

kjinx

Hi there

I'm having a real headache with stamp duty. I am recently divorced. I am trying to transfer the marital home into my name along with my partner and remove my ex husband. He's on board with this so should have been a simple thing to do! 
There is a query on stamp duty. If the house was being transfered to me solely there would be no stamp duty to pay as is part of my consent order. My partner owns another house in which he still lives, so my house will be a second property to him.
We are getting difference of opinions on whether we have any stamp duty to pay and how much. My transfer solicitor won't touch it with a barge pole. I can't find a tax specialist willing or able to help. 
My ex is getting frustrated as he needs his portion of the equity but I'm in checkmate as can't find a way forward.
Can anyone help advise?
Thank you

dimbo61

Your partner will own 2 properties so will have to pay Stamp duty plus 3%
Can he sell his house ?

Snookie12cat

Yes, If he goes on the deeds then he will owe 3% extra in England and 4% in Wales. Not 100% sure if it would be the full value or just the half but you will end up having to pay some. 

Why dont you call the stamp duty department and ask them? I am sure they get queries all the time like this. 

Snookie12cat

Call HMRC for help with Stamp Duty Land Tax queries.

Telephone:
0300 200 3510

SDLT_Geek

kjinx said:

Hi there

I'm having a real headache with stamp duty. I am recently divorced. I am trying to transfer the marital home into my name along with my partner and remove my ex husband. He's on board with this so should have been a simple thing to do! 
There is a query on stamp duty. If the house was being transfered to me solely there would be no stamp duty to pay as is part of my consent order. My partner owns another house in which he still lives, so my house will be a second property to him.
We are getting difference of opinions on whether we have any stamp duty to pay and how much. My transfer solicitor won't touch it with a barge pole. I can't find a tax specialist willing or able to help. 
My ex is getting frustrated as he needs his portion of the equity but I'm in checkmate as can't find a way forward.
Can anyone help advise?
Thank you

I will assume the property is in England, so the tax concerned is stamp duty land tax.

If the transfer is between the parties on a divorce pursuant to court order, then the transfer is wholly exempt from SDLT; there is no question of the extra 3% SDLT applying.

However, if the transfer is also to a new partner, then the exemption does not apply.  If your new partner is taking a share in the property and has another property, then we would expect the extra 3% SDLT to apply to the whole of the "chargeable consideration".

The "chargeable consideration" in a regular purchase is usually just the price.  In a divorce situation it can be harder to quantify.

It sounds as if there is a mortgage.  You are having to increase the debt to fund the money to be paid to your ex husband?

If your ex husband has a half share in the property which you and your new partner are buying, then it might well be that the SDLT is worked out on half of the value of the property.

kjinx

Snookie12cat said:

Call HMRC for help with Stamp Duty Land Tax queries.

Telephone:
0300 200 3510

Thanks for this suggestion. I've tried ringing them but they won't answer any queries in any way other than postal letter! They have stated it can take up to 2 weeks for any sort of reply and then may need further information so coukd drag on a long time.

kjinx

SDLT_Geek said:

kjinx said:

Hi there

I'm having a real headache with stamp duty. I am recently divorced. I am trying to transfer the marital home into my name along with my partner and remove my ex husband. He's on board with this so should have been a simple thing to do! 
There is a query on stamp duty. If the house was being transfered to me solely there would be no stamp duty to pay as is part of my consent order. My partner owns another house in which he still lives, so my house will be a second property to him.
We are getting difference of opinions on whether we have any stamp duty to pay and how much. My transfer solicitor won't touch it with a barge pole. I can't find a tax specialist willing or able to help. 
My ex is getting frustrated as he needs his portion of the equity but I'm in checkmate as can't find a way forward.
Can anyone help advise?
Thank you

I will assume the property is in England, so the tax concerned is stamp duty land tax.

If the transfer is between the parties on a divorce pursuant to court order, then the transfer is wholly exempt from SDLT; there is no question of the extra 3% SDLT applying.

However, if the transfer is also to a new partner, then the exemption does not apply.  If your new partner is taking a share in the property and has another property, then we would expect the extra 3% SDLT to apply to the whole of the "chargeable consideration".

The "chargeable consideration" in a regular purchase is usually just the price.  In a divorce situation it can be harder to quantify.

It sounds as if there is a mortgage.  You are having to increase the debt to fund the money to be paid to your ex husband?

If your ex husband has a half share in the property which you and your new partner are buying, then it might well be that the SDLT is worked out on half of the value of the property.

You sound incredibly knowledgeable thank you for your reply.

Yes I'm in England. 

I'm not sure how to work out the 'chargeable consideration '. So my mortgage with my ex has a redemption figure of 127,450 currently. The house has an agreed value of 245,000. My remortgage will be for 160,000 with my new partner. 
From the equity I take 65k, my ex gets the rest for his pay out. (Circa 52k I think).

Am I right that my new partner could claim back stamp duty if he sells within 3 years? Our long term goal is to live together but we're not quite ready yet. 

Thanks again

martindow

kjinx said:
Am I right that my new partner could claim back stamp duty if he sells within 3 years? Our long term goal is to live together but we're not quite ready yet.

If you have any doubts it would be unwise to get financially entangled.  You don't want to sort out your mortgage /divorce by getting linked financially with your new partner unless you are certain and ready.

Apologies if I have misunderstood the situation.

kjinx

martindow said:

kjinx said:
Am I right that my new partner could claim back stamp duty if he sells within 3 years? Our long term goal is to live together but we're not quite ready yet.

If you have any doubts it would be unwise to get financially entangled.  You don't want to sort out your mortgage /divorce by getting linked financially with your new partner unless you are certain and ready.

Apologies if I have misunderstood the situation.

Hi there! 
I appreciate how that must have read! We are ready in terms of our relationship but his work is close to his own house and taking it slowly with me having a child from previous relationship. She absolutely adores him but I'm aware she's been through a lot these last few years so taking it slow with actual living arrangements. She knows its on the cards as a long term plan and is happy. 
We will also get a declaration of trust legally written up to help protect our own personal investments.

SDLT_Geek

kjinx said:

SDLT_Geek said:

kjinx said:

Hi there

I'm having a real headache with stamp duty. I am recently divorced. I am trying to transfer the marital home into my name along with my partner and remove my ex husband. He's on board with this so should have been a simple thing to do! 
There is a query on stamp duty. If the house was being transfered to me solely there would be no stamp duty to pay as is part of my consent order. My partner owns another house in which he still lives, so my house will be a second property to him.
We are getting difference of opinions on whether we have any stamp duty to pay and how much. My transfer solicitor won't touch it with a barge pole. I can't find a tax specialist willing or able to help. 
My ex is getting frustrated as he needs his portion of the equity but I'm in checkmate as can't find a way forward.
Can anyone help advise?
Thank you

I will assume the property is in England, so the tax concerned is stamp duty land tax.

If the transfer is between the parties on a divorce pursuant to court order, then the transfer is wholly exempt from SDLT; there is no question of the extra 3% SDLT applying.

However, if the transfer is also to a new partner, then the exemption does not apply.  If your new partner is taking a share in the property and has another property, then we would expect the extra 3% SDLT to apply to the whole of the "chargeable consideration".

The "chargeable consideration" in a regular purchase is usually just the price.  In a divorce situation it can be harder to quantify.

It sounds as if there is a mortgage.  You are having to increase the debt to fund the money to be paid to your ex husband?

If your ex husband has a half share in the property which you and your new partner are buying, then it might well be that the SDLT is worked out on half of the value of the property.

You sound incredibly knowledgeable thank you for your reply.

Yes I'm in England. 

I'm not sure how to work out the 'chargeable consideration '. So my mortgage with my ex has a redemption figure of 127,450 currently. The house has an agreed value of 245,000. My remortgage will be for 160,000 with my new partner. 
From the equity I take 65k, my ex gets the rest for his pay out. (Circa 52k I think).

Am I right that my new partner could claim back stamp duty if he sells within 3 years? Our long term goal is to live together but we're not quite ready yet. 

Thanks again

Here are some thoughts on chargeable consideration.  I am assuming that you and your ex-partner have equal shares in the property.

A proportion of the debt of £127,450 from which your ex husband will be released counts as chargeable consideration, the proportion is 50%, so that is £63,725.

This is added to anything else of value given to him in return, you mention cash of about £52,000.  (That is close to half of the equity of £117,550.)

So the chargeable consideration is likely to be close to half the value of the house (as one would expect) which is £122,500.