Land Transaction Tax - Do I need to pay it?

Nate_J

Hi,

I've had a search not only around these forums but the obvious Google search brought up some answers, of which some are pretty vague and not specific to my case so hence why I'm asking my query here.

Myself along with two other siblings inherited equal shares in a property. I have now bought their shares out of the property to be the sole owner to use as my main residence. My question is, does the Land Transaction Tax get calculated on the two shares that I've bought out, or the full property value (including my share)?

The reason for the query is because I've received a rather unexpected invoice from the solicitor regarding paying the land transaction tax, however they did not once mention that we'd need to pay it, but I recall numerous conversations from the beginning when we instructed them stating that the transfer was under the threshold (now £180,000) so we wouldn't need to pay it. I don't have this in writing at the moment unfortunately so I'm just trying to gather the correct info so I can go back to them pre-loaded.

I've found it difficult to find the answer on the Land Transaction Tax (Wales) whereas the SDLT for England is far easier to check with the online manual. If my case was in England, thereby falling under the Stamp Duty Land Tax (SDLT) then I would not need to pay, as the transaction would be under the current threshold.

Thanks,

SDLT_Geek

Nate_J said:

Hi,

I've had a search not only around these forums but the obvious Google search brought up some answers, of which some are pretty vague and not specific to my case so hence why I'm asking my query here.

Myself along with two other siblings inherited equal shares in a property. I have now bought their shares out of the property to be the sole owner to use as my main residence. My question is, does the Land Transaction Tax get calculated on the two shares that I've bought out, or the full property value (including my share)?

The reason for the query is because I've received a rather unexpected invoice from the solicitor regarding paying the land transaction tax, however they did not once mention that we'd need to pay it, but I recall numerous conversations from the beginning when we instructed them stating that the transfer was under the threshold (now £180,000) so we wouldn't need to pay it. I don't have this in writing at the moment unfortunately so I'm just trying to gather the correct info so I can go back to them pre-loaded.

I've found it difficult to find the answer on the Land Transaction Tax (Wales) whereas the SDLT for England is far easier to check with the online manual. If my case was in England, thereby falling under the Stamp Duty Land Tax (SDLT) then I would not need to pay, as the transaction would be under the current threshold.

Thanks,

The answer will depend partly on whether you (or any spouse / civil partner) own any other property.
  
It would be helpful to know what LTT has been requested.  Is it 4% of the price you paid for the two shares?

Snookie12cat

Nate_J said:

Hi,

I've had a search not only around these forums but the obvious Google search brought up some answers, of which some are pretty vague and not specific to my case so hence why I'm asking my query here.

Myself along with two other siblings inherited equal shares in a property. I have now bought their shares out of the property to be the sole owner to use as my main residence. My question is, does the Land Transaction Tax get calculated on the two shares that I've bought out, or the full property value (including my share)?

The reason for the query is because I've received a rather unexpected invoice from the solicitor regarding paying the land transaction tax, however they did not once mention that we'd need to pay it, but I recall numerous conversations from the beginning when we instructed them stating that the transfer was under the threshold (now £180,000) so we wouldn't need to pay it. I don't have this in writing at the moment unfortunately so I'm just trying to gather the correct info so I can go back to them pre-loaded.

I've found it difficult to find the answer on the Land Transaction Tax (Wales) whereas the SDLT for England is far easier to check with the online manual. If my case was in England, thereby falling under the Stamp Duty Land Tax (SDLT) then I would not need to pay, as the transaction would be under the current threshold.

Thanks,

If you actually mean LTT as in the Welsh version, the LTT team are super helpful and will email you back very quickly with an answer. Generally though the rules do not fall far from English Stamp Duty, so I would expect it likely to be the same. 

Nate_J

SDLT_Geek said:

Nate_J said:

Hi,

I've had a search not only around these forums but the obvious Google search brought up some answers, of which some are pretty vague and not specific to my case so hence why I'm asking my query here.

Myself along with two other siblings inherited equal shares in a property. I have now bought their shares out of the property to be the sole owner to use as my main residence. My question is, does the Land Transaction Tax get calculated on the two shares that I've bought out, or the full property value (including my share)?

The reason for the query is because I've received a rather unexpected invoice from the solicitor regarding paying the land transaction tax, however they did not once mention that we'd need to pay it, but I recall numerous conversations from the beginning when we instructed them stating that the transfer was under the threshold (now £180,000) so we wouldn't need to pay it. I don't have this in writing at the moment unfortunately so I'm just trying to gather the correct info so I can go back to them pre-loaded.

I've found it difficult to find the answer on the Land Transaction Tax (Wales) whereas the SDLT for England is far easier to check with the online manual. If my case was in England, thereby falling under the Stamp Duty Land Tax (SDLT) then I would not need to pay, as the transaction would be under the current threshold.

Thanks,

The answer will depend partly on whether you (or any spouse / civil partner) own any other property.
  
It would be helpful to know what LTT has been requested.  Is it 4% of the price you paid for the two shares?

Apologies, I did forget to mention that in the initial post. I am a first time buyer and have never previously owned a property and/or land, I had been renting prior to this.

The LTT that has been requested is based on the full property purchase amount (£250,000), that being £70k over the £180k LTT threshold. The LTT has been calculated on 3.5% of the £70k, that being £2,450.

Nate_J

Snookie12cat said:

Nate_J said:

Hi,

I've had a search not only around these forums but the obvious Google search brought up some answers, of which some are pretty vague and not specific to my case so hence why I'm asking my query here.

Myself along with two other siblings inherited equal shares in a property. I have now bought their shares out of the property to be the sole owner to use as my main residence. My question is, does the Land Transaction Tax get calculated on the two shares that I've bought out, or the full property value (including my share)?

The reason for the query is because I've received a rather unexpected invoice from the solicitor regarding paying the land transaction tax, however they did not once mention that we'd need to pay it, but I recall numerous conversations from the beginning when we instructed them stating that the transfer was under the threshold (now £180,000) so we wouldn't need to pay it. I don't have this in writing at the moment unfortunately so I'm just trying to gather the correct info so I can go back to them pre-loaded.

I've found it difficult to find the answer on the Land Transaction Tax (Wales) whereas the SDLT for England is far easier to check with the online manual. If my case was in England, thereby falling under the Stamp Duty Land Tax (SDLT) then I would not need to pay, as the transaction would be under the current threshold.

Thanks,

If you actually mean LTT as in the Welsh version, the LTT team are super helpful and will email you back very quickly with an answer. Generally though the rules do not fall far from English Stamp Duty, so I would expect it likely to be the same. 

I will be in touch with them later today to see if they can confirm whether it is payable in my situation.

googler

Are you referring to Scottish Land & Building Transaction Tax (LBTT) ?

Snow_Angel

googler said:

Are you referring to Scottish Land & Building Transaction Tax (LBTT) ?

 Wales. It says in his original post.

SDLT_Geek

Nate_J said:

SDLT_Geek said:

Nate_J said:

Hi,

I've had a search not only around these forums but the obvious Google search brought up some answers, of which some are pretty vague and not specific to my case so hence why I'm asking my query here.

Myself along with two other siblings inherited equal shares in a property. I have now bought their shares out of the property to be the sole owner to use as my main residence. My question is, does the Land Transaction Tax get calculated on the two shares that I've bought out, or the full property value (including my share)?

The reason for the query is because I've received a rather unexpected invoice from the solicitor regarding paying the land transaction tax, however they did not once mention that we'd need to pay it, but I recall numerous conversations from the beginning when we instructed them stating that the transfer was under the threshold (now £180,000) so we wouldn't need to pay it. I don't have this in writing at the moment unfortunately so I'm just trying to gather the correct info so I can go back to them pre-loaded.

I've found it difficult to find the answer on the Land Transaction Tax (Wales) whereas the SDLT for England is far easier to check with the online manual. If my case was in England, thereby falling under the Stamp Duty Land Tax (SDLT) then I would not need to pay, as the transaction would be under the current threshold.

Thanks,

The answer will depend partly on whether you (or any spouse / civil partner) own any other property.
  
It would be helpful to know what LTT has been requested.  Is it 4% of the price you paid for the two shares?

Apologies, I did forget to mention that in the initial post. I am a first time buyer and have never previously owned a property and/or land, I had been renting prior to this.

The LTT that has been requested is based on the full property purchase amount (£250,000), that being £70k over the £180k LTT threshold. The LTT has been calculated on 3.5% of the £70k, that being £2,450.

That is clearer, thank you.  The answer will depend on how the purchase has been structured.

If what has happened is that you have purchased the property from the executors for £250,000, then I would expect the LTT to be worked out on £250,000.  That is even though part of that £250,000 will come back to you as a beneficiary.

If what has happened is that you have bought out shares from siblings (for say £166,667) then the LTT should be assessed on that sum, which would be zero.

Nate_J

SDLT_Geek said:

Nate_J said:

SDLT_Geek said:

Nate_J said:

Hi,

I've had a search not only around these forums but the obvious Google search brought up some answers, of which some are pretty vague and not specific to my case so hence why I'm asking my query here.

Myself along with two other siblings inherited equal shares in a property. I have now bought their shares out of the property to be the sole owner to use as my main residence. My question is, does the Land Transaction Tax get calculated on the two shares that I've bought out, or the full property value (including my share)?

The reason for the query is because I've received a rather unexpected invoice from the solicitor regarding paying the land transaction tax, however they did not once mention that we'd need to pay it, but I recall numerous conversations from the beginning when we instructed them stating that the transfer was under the threshold (now £180,000) so we wouldn't need to pay it. I don't have this in writing at the moment unfortunately so I'm just trying to gather the correct info so I can go back to them pre-loaded.

I've found it difficult to find the answer on the Land Transaction Tax (Wales) whereas the SDLT for England is far easier to check with the online manual. If my case was in England, thereby falling under the Stamp Duty Land Tax (SDLT) then I would not need to pay, as the transaction would be under the current threshold.

Thanks,

The answer will depend partly on whether you (or any spouse / civil partner) own any other property.
  
It would be helpful to know what LTT has been requested.  Is it 4% of the price you paid for the two shares?

Apologies, I did forget to mention that in the initial post. I am a first time buyer and have never previously owned a property and/or land, I had been renting prior to this.

The LTT that has been requested is based on the full property purchase amount (£250,000), that being £70k over the £180k LTT threshold. The LTT has been calculated on 3.5% of the £70k, that being £2,450.

That is clearer, thank you.  The answer will depend on how the purchase has been structured.

If what has happened is that you have purchased the property from the executors for £250,000, then I would expect the LTT to be worked out on £250,000.  That is even though part of that £250,000 will come back to you as a beneficiary.

If what has happened is that you have bought out shares from siblings (for say £166,667) then the LTT should be assessed on that sum, which would be zero.

The property was not transferred into the beneficiaries names prior to the sale and that was partially due to trying to retrieve the help to buy isa bonus (which in itself is another story which I created a post on), but I essentially applied my full beneficial share (33.33%) of the house and purchased the other shares (66.66%) from my siblings.

But I'm still unsure where I stand with the LTT, and where in writing will this be confirmed.

GDB2222

Should the solicitor have advised that there were two ways to structure this, one of which costs more in tax?

SDLT_Geek

Nate_J said:

SDLT_Geek said:

Nate_J said:

SDLT_Geek said:

Nate_J said:

Hi,

I've had a search not only around these forums but the obvious Google search brought up some answers, of which some are pretty vague and not specific to my case so hence why I'm asking my query here.

Myself along with two other siblings inherited equal shares in a property. I have now bought their shares out of the property to be the sole owner to use as my main residence. My question is, does the Land Transaction Tax get calculated on the two shares that I've bought out, or the full property value (including my share)?

The reason for the query is because I've received a rather unexpected invoice from the solicitor regarding paying the land transaction tax, however they did not once mention that we'd need to pay it, but I recall numerous conversations from the beginning when we instructed them stating that the transfer was under the threshold (now £180,000) so we wouldn't need to pay it. I don't have this in writing at the moment unfortunately so I'm just trying to gather the correct info so I can go back to them pre-loaded.

I've found it difficult to find the answer on the Land Transaction Tax (Wales) whereas the SDLT for England is far easier to check with the online manual. If my case was in England, thereby falling under the Stamp Duty Land Tax (SDLT) then I would not need to pay, as the transaction would be under the current threshold.

Thanks,

The answer will depend partly on whether you (or any spouse / civil partner) own any other property.
  
It would be helpful to know what LTT has been requested.  Is it 4% of the price you paid for the two shares?

Apologies, I did forget to mention that in the initial post. I am a first time buyer and have never previously owned a property and/or land, I had been renting prior to this.

The LTT that has been requested is based on the full property purchase amount (£250,000), that being £70k over the £180k LTT threshold. The LTT has been calculated on 3.5% of the £70k, that being £2,450.

That is clearer, thank you.  The answer will depend on how the purchase has been structured.

If what has happened is that you have purchased the property from the executors for £250,000, then I would expect the LTT to be worked out on £250,000.  That is even though part of that £250,000 will come back to you as a beneficiary.

If what has happened is that you have bought out shares from siblings (for say £166,667) then the LTT should be assessed on that sum, which would be zero.

The property was not transferred into the beneficiaries names prior to the sale and that was partially due to trying to retrieve the help to buy isa bonus (which in itself is another story which I created a post on), but I essentially applied my full beneficial share (33.33%) of the house and purchased the other shares (66.66%) from my siblings.

But I'm still unsure where I stand with the LTT, and where in writing will this be confirmed.

If your one third share was not first transferred to you first, it sounds as if you bought the whole of the property from the executors for £250,000.  Is that what the documents say?