Gifting part of buy to let mortgaged house to spouse

propertyrental

Not sure anyone can make it clearer than SDLT_Geek:

SDLT_Geek said:

roadweary said:

I don't know what to say.  I'd love it to be true but the guides I show contradict that.....and the example you show doesn't apply to me.

Legal advice so far says 50% of the mortgage will attract Stamp Duty.

I can't see where in the link you sent, it demonstrates or overrides the need to pay Stamp Duty - believe, me, I don't want to....but I don't see it.

SDLT is only due if the "chargeable consideration" is above the relevant threshold.  You have worked out the chargeable consideration as £45,000.  

If the higher rates apply, then the threshold is £40,000 and so SDLT would be due.
But the higher rates do not apply, so the threshold is £250,000 and there is no SDLT to pay (though a return is needed).

roadweary

propertyrental said:

Not sure anyone can make it clearer than SDLT_Geek:

SDLT_Geek said:

roadweary said:

I don't know what to say.  I'd love it to be true but the guides I show contradict that.....and the example you show doesn't apply to me.

Legal advice so far says 50% of the mortgage will attract Stamp Duty.

I can't see where in the link you sent, it demonstrates or overrides the need to pay Stamp Duty - believe, me, I don't want to....but I don't see it.

SDLT is only due if the "chargeable consideration" is above the relevant threshold.  You have worked out the chargeable consideration as £45,000.  

If the higher rates apply, then the threshold is £40,000 and so SDLT would be due.
But the higher rates do not apply, so the threshold is £250,000 and there is no SDLT to pay (though a return is needed).

That feels a little unfair.  I'm not legally trained.  My work is technology based and involves problem solving.  So when I'm trying to solve problems, I try to gather the relevant information and test it.

In this case, I've had information passed through my mortgage broker from a solicitor friend saying that the payable SLDT is 3% of £45,000.

I was happy to have the link provided by SDLT_Geek but the meaning didn't feel explicit (and I did look up Conditions A and D).  The examples given didn't correlate exactly to my situation either - Mrs I appears to class as a first time buyer.

At the same time, the calculators (both gov.uk and third party) were suggesting 3% of £90,000 and the references I provided in my posts appeared to explicitly contradict the link/intepretation provided by SDLT_Geek.

Clearly I'm very motivated not pay any more taxes/charges than required.  So all I can do is gather evidence, try to understand and be prepared to provide that information - hopefully tomorrow if the mortgage provided assigned solicitor gives a different answer.

At the same time, I've gone back to my mortgage broker with the specific explanation and link above and asked if he might ask his solicitor friend why they feel I would be charged at the higher rate.

I very much appreciate the assistance I'm receiving - but of course I'll explain why the guidance seems confusing and contradictory.

Thanks,
R

SDLT_Geek

CSI_Yorkshire said:

roadweary said:

And the date of purchase applies to the date of re-mortgage....not the date I originally purchased (roughly 2007?)

Would the mortgage company be counted as someone else having an interest in the property?

"If (before or after the transaction takes place) someone other than the spouses or civil partners has an interest in the property, the transaction will still count as a higher rates transaction."

The mortgage company has a charge on the property, but not an interest in the property, at least that's how I think it stands.

Date, I'm not sure about, but I'd guess it would be the date of transaction.

Correct as to the mortgage company.

The SDLT is assessed on the basis of the rules and rates current at the date of the transaction, so at 0% in this case of a transfer of a share from one spouse to another.

Annisele

roadweary said:

My work is technology based and involves problem solving.  So when I'm trying to solve problems, I try to gather the relevant information and test it.

In that case I suspect your problem is that you're expecting the rules to make sense, and that you're looking for them to be internally consistent . Tax rules quite often do make sense, and the various exceptions are usually logical - but sometimes you just have to shrug your shoulders and accept that they're weird.

In this case, there are all sorts of public policy reasons for not charging tax on transfers between married couples. So the rule is consistent with all sorts of other rules about capital gains tax etc. But the rules are just the rules; it's completely impossible to determine them from first principles.

roadweary

As an update - I've reached the stage that I have to sign a bunch of documents:

• Statutory Declaration of Solvency - witnessed by a solicitor - I don't yet know the cost.
• A joint ownership form - where I'll say I want Tenants in Common and a 99% share for my wife.
• A TR1 form that will state - "The transfer is not for money or anything that has a monetary value" and the Transferor transfers with Full Title Guarantee
  

*but* also a form about SDLT where I can only choose between:

This is my/our sole property and not subject to SDLT at the higher rate for additional properties.

I/We confirm that this is an additional/multiple property and subject to SDLT at the higher rate for additional properties.

Neither is applicable.  It's an additional property but I've been told I shouldn't be subject to SDLT at the higher rate.  Integrar are pretty faceless and you can't speak with an actual solicitor.  They say that they will calculate the SDLT and discuss it with me once I have signed all the forms.....but it's a bit worrying!

Oh, they also talk about a Trust Deed for sale / death...but we don't want any of that (we have our own wills to take care of that)....just so long as we have whatever we need so that the income can be accounted for as 99% hers....