Shared ownership staircasing stamp duty

DOrang

Presently trying to staircase from 70% to 100%. Having trouble getting clarity about stamp duty owed and HMRC is not much help. 

The scenario:

Bought 70% of £200000 in 2014 I.e. £140,000. Paid stamp duty of £1400. 

House now valued at £250k. £75k to pay. 

I think the stamp duty is worked out as( £1400 * £75000 )/£250,000 i.e. about £780.

Based on gov.uk (cannot post link...)

My conveyancer thinks it's about £1700. They may very well be correct, but I thought I would check. 

Thanks

SDLT_Geek

DOrang said:

Presently trying to staircase from 70% to 100%. Having trouble getting clarity about stamp duty owed and HMRC is not much help. 

The scenario:

Bought 70% of £200000 in 2014 I.e. £140,000. Paid stamp duty of £1400. 

House now valued at £250k. £75k to pay. 

I think the stamp duty is worked out as( £1400 * £75000 )/£250,000 i.e. about £780.

Based on gov.uk (cannot post link...)

My conveyancer thinks it's about £1700. They may very well be correct, but I thought I would check. 

Thanks

I make the SDLT due on staircasing £628 as follows.

First add up the payments made: £140K + £75K = £215K
Work out SDLT at today's rates on £215K; that would be SDLT of £1,800.
But the SDLT you pay is a fraction of this.  The fraction is £75K / £215K.
That fraction of £1,800 is £628.

There is no more SDLT on the initial £1,400 because the lease was granted after 12 March 2008.

The guidance to the HMRC guidance is here: https://www.gov.uk/guidance/sdlt-shared-ownership-property

This is not a case where you are doing a back to back sale of the whole property?  If so, HMRC have recently said in correspondence that they accept that pre-completion transaction relief can apply and say they will amend their guidance to confirm the point.

DOrang

Many thanks for replying!

Sorry, 'back to back sale'? I'm simply buying out the remaining 30%.

SDLT_Geek

DOrang said:

Many thanks for replying!

Sorry, 'back to back sale'? I'm simply buying out the remaining 30%.

If you are just buying out there is no "back to back" sale.

Sometimes people staircase to 100% at the time of selling the lease on, that is where a relief can apply.

SDLT_Geek

My calculations assume that when you bought the 70% share in 2014 you bought from the social landlord.  Is that right?

The SDLT position would be different if in 2014 you bought from a different lessee (who had previously been granted the lease).

DOrang

SDLT_Geek said:

My calculations assume that when you bought the 70% share in 2014 you bought from the social landlord.  Is that right?

The SDLT position would be different if in 2014 you bought from a different lessee (who had previously been granted the lease).

That's correct, thanks.