Help! Shared ownership SDLT

AMDC88

Hi, 

I brought a Resale Shared ownership house (not a new build) in 2019 and would like to buy the final share in the next 18months. In preparation for this I am trying to calculate the SDLT on the final share purchase. Can anyone help me to understand how we calculate it? Original Lease was granted in 2002. Stamp duty was deferred when the initial 50% share was purchased. 

50% share brought in 2019 for 100k (200k FMV) 
25% share brought in 2022 for 60k (240k FMV) 
Final 25% hopefully this year/2024- EST 70k (280k estimated FMV) 

Please help me understand it as it's driving me crazy! 

Thanks in advance! 

SDLT_Geek

AMDC88 said:

Hi, 

I brought a Resale Shared ownership house (not a new build) in 2019 and would like to buy the final share in the next 18months. In preparation for this I am trying to calculate the SDLT on the final share purchase. Can anyone help me to understand how we calculate it? Original Lease was granted in 2002. Stamp duty was deferred when the initial 50% share was purchased. 

50% share brought in 2019 for 100k (200k FMV) 
25% share brought in 2022 for 60k (240k FMV) 
Final 25% hopefully this year/2024- EST 70k (280k estimated FMV) 

Please help me understand it as it's driving me crazy! 

Thanks in advance! 

The 50 % share you bought in 2019 was from an outgoing lessee?  (You paid for an assignment of an existing lease?)

The 25% share bought in 2022 was by way of a staircasing transaction, paying a social landlord?

If both are right then a key to understanding the SDLT liability is establishing which transactions are “linked”.

AMDC88

SDLT_Geek said:

AMDC88 said:

Hi, 

I brought a Resale Shared ownership house (not a new build) in 2019 and would like to buy the final share in the next 18months. In preparation for this I am trying to calculate the SDLT on the final share purchase. Can anyone help me to understand how we calculate it? Original Lease was granted in 2002. Stamp duty was deferred when the initial 50% share was purchased. 

50% share brought in 2019 for 100k (200k FMV) 
25% share brought in 2022 for 60k (240k FMV) 
Final 25% hopefully this year/2024- EST 70k (280k estimated FMV) 

Please help me understand it as it's driving me crazy! 

Thanks in advance! 

The 50 % share you bought in 2019 was from an outgoing lessee?  (You paid for an assignment of an existing lease?)

The 25% share bought in 2022 was by way of a staircasing transaction, paying a social landlord?

If both are right then a key to understanding the SDLT liability is establishing which transactions are “linked”.

Yes, both assumptions are correct. So the first transaction won't be linked to the final two? As the first transaction was with the outgoing lesse and the two 25% transactions are direct with the housing association.

It's so confusing 😭 

SDLT_Geek

AMDC88 said:

SDLT_Geek said:

AMDC88 said:

Hi, 

I brought a Resale Shared ownership house (not a new build) in 2019 and would like to buy the final share in the next 18months. In preparation for this I am trying to calculate the SDLT on the final share purchase. Can anyone help me to understand how we calculate it? Original Lease was granted in 2002. Stamp duty was deferred when the initial 50% share was purchased. 

50% share brought in 2019 for 100k (200k FMV) 
25% share brought in 2022 for 60k (240k FMV) 
Final 25% hopefully this year/2024- EST 70k (280k estimated FMV) 

Please help me understand it as it's driving me crazy! 

Thanks in advance! 

The 50 % share you bought in 2019 was from an outgoing lessee?  (You paid for an assignment of an existing lease?)

The 25% share bought in 2022 was by way of a staircasing transaction, paying a social landlord?

If both are right then a key to understanding the SDLT liability is establishing which transactions are “linked”.

Yes, both assumptions are correct. So the first transaction won't be linked to the final two? As the first transaction was with the outgoing lesse and the two 25% transactions are direct with the housing association.

It's so confusing 😭 

That is right, the second two transactions cannot be linked to the first, as there are different (and unconnected) vendors.

The total chargeable consideration for the two later linked transactions is £130,000 (taking the £60k and £70k figures).  This is below the current threshold (of £250k) for SDLT to be payable, assuming the 3% surcharge for additional properties does not apply.

AMDC88

Thanks for all the help @SDLT_Geek guess we got lucky here. So even if the 1st transaction was linked there still wouldn't be an stamp duty to pay because the total would be £230k which is still under the current threshold of £250k? 

No additional properties. It's been hard enough trying to buy a family home to live in, let alone being able to afford a 2nd home 🤣

SDLT_Geek

One date to watch is 31 March 2025.  After that the thresholds for SDLT are due to fall, so SDLT would be due if the aggregate for the linked transactions is over £125,000. Here they are only a little over that, so not a biggy.