Parent passed away and now its an extra £2300 stamp duty to by our house.

Derk17

Having sold our home two years ago and moved into rented whilst we searched for one more suitable we have finally had an offer accepted and started conveyancing proceedings. unfortunately the wife's father passed away recently and left a small flat ( too small for us) so we just rented it out . Now it seems that it is classified as a second property and we have to pay a staggering £22800 extra stamp duty on top of the normal stamp duty. Had we found a house while he was alive then no extra duty applies.  has anyone had similar and overcome it.

Voyager2002

That is correct.

However, if you dispose of the flat within a reasonable amount of time after buying the house you can reclam the additional SDLT.

DullGreyGuy

Presumably the small flat is still worth more than either the £2,300 in the title or £22,800 in the message and so you are still quids in overall? Plus if you sell it within a reasonable time after buying your new place you can reclaim the extra

mjm3346

If you had simply sold the flat instead of renting it out there would have been no issue with stamp duty.

silvercar

Create a limited company and “sell” the fathers flat to it. That will bring you back to being a non-owner. Of course there will be costs of doing this, but nothing like the £22,800 you are facing.

getmore4less

silvercar said:

Create a limited company and “sell” the fathers flat to it. That will bring you back to being a non-owner. Of course there will be costs of doing this, but nothing like the £22,800 you are facing.

What SDLT does the ltd company pay?

p00hsticks

silvercar said:

Create a limited company and “sell” the fathers flat to it. That will bring you back to being a non-owner. Of course there will be costs of doing this, but nothing like the £22,800 you are facing.

I strongly suspect that the OP has made a typo and that the sum in question is actually £2,800 (close to the thread title)/

DullGreyGuy

p00hsticks said:

silvercar said:

Create a limited company and “sell” the fathers flat to it. That will bring you back to being a non-owner. Of course there will be costs of doing this, but nothing like the £22,800 you are facing.

I strongly suspect that the OP has made a typo and that the sum in question is actually £2,800 (close to the thread title)/

Depends if you think the OP s buying a £93k or £760k home, suspect they are never coming back so we'll never know.

theoretica

Derk17 said:

Having sold our home two years ago and moved into rented whilst we searched for one more suitable we have finally had an offer accepted and started conveyancing proceedings. unfortunately the wife's father passed away recently and left a small flat ( too small for us) so we just rented it out . Now it seems that it is classified as a second property and we have to pay a staggering £22800 extra stamp duty on top of the normal stamp duty. Had we found a house while he was alive then no extra duty applies.  has anyone had similar and overcome it.

I would seek expert advice, but as you have sold your previous main home I hope you can apply that exemption to the extra stamp duty - it doesn't apply just to sales on the same day in a chain.

Keep_pedalling

theoretica said:

Derk17 said:

Having sold our home two years ago and moved into rented whilst we searched for one more suitable we have finally had an offer accepted and started conveyancing proceedings. unfortunately the wife's father passed away recently and left a small flat ( too small for us) so we just rented it out . Now it seems that it is classified as a second property and we have to pay a staggering £22800 extra stamp duty on top of the normal stamp duty. Had we found a house while he was alive then no extra duty applies.  has anyone had similar and overcome it.

I would seek expert advice, but as you have sold your previous main home I hope you can apply that exemption to the extra stamp duty doesn't apply just to sales on the same day in a chain.

I think it depends on order. In this case it seems they went from owning one property to zero, then the inheritance put them back to one and the new purchase takes them to two for the first time so unless they dispose of the flat they will be hit with the extra tax.

stig

@Keep_pedalling it’s the other way around. The flat was never the OP’s main residence so disposing if it makes no difference. @theoretica is correct - if they lived in the home they sold at some time in the three years before buying their new home, the replacement of main residence exemption might apply, subject to a few conditions. Buying one main residence to replace another is the only way to get round the surcharge if you own more than one property.