Shared Ownership Repossession Stamp Duty

CoolBowTiesAre

Hello everyone, 

Years ago my partner, at the time, and I bought a shared ownership property for a 35% share of £275k in a 60/40 split. 

Unfortunately, due to a few different things happening this property recently got repossessed. It's now on the market for 235k and is being sold at 100%. 

The building society, which took control of the property, are informing me that I'm liable to pay about 4k in Stamp Duty. I'm a little confused with this as I thought this was when I owned more than 80% of the property. I realise they're selling for 100% but I only ever had 35% myself. Would someone be able to explain whether this is correct or not? 

Also, I'm a little worried about potentially having to go bankrupt as we've calculated that we could owe around 25k and I'm only on Universal Credit at the moment. Two quick other questions if anyone is able to answer: 

1) As we bought the property in the 60/40 split, is anything we owe split into this range? And if one of us couldn't pay, does the whole lump go to the other person to pay?

2) Do building societies usually try to get a payment plan before anything else? I'd much rather do a payment plan than having to go bankrupt! 

Many thanks for anyone that is able to offer any help. 

SDLT_Geek

CoolBowTiesAre said:

Hello everyone, 

Years ago my partner, at the time, and I bought a shared ownership property for a 35% share of £275k in a 60/40 split. 

Unfortunately, due to a few different things happening this property recently got repossessed. It's now on the market for 235k and is being sold at 100%. 

The building society, which took control of the property, are informing me that I'm liable to pay about 4k in Stamp Duty. I'm a little confused with this as I thought this was when I owned more than 80% of the property. I realise they're selling for 100% but I only ever had 35% myself. Would someone be able to explain whether this is correct or not? 

Also, I'm a little worried about potentially having to go bankrupt as we've calculated that we could owe around 25k and I'm only on Universal Credit at the moment. Two quick other questions if anyone is able to answer: 

1) As we bought the property in the 60/40 split, is anything we owe split into this range? And if one of us couldn't pay, does the whole lump go to the other person to pay?

2) Do building societies usually try to get a payment plan before anything else? I'd much rather do a payment plan than having to go bankrupt! 

Many thanks for anyone that is able to offer any help. 

My guess is that the Building Society are exercising their powers under the mortgage to staircase out to 100%, so that they can sell the property at 100%.  You would have to look at the mortgage terms to see if they have power to do this in your name and charge you the costs.  It does seem likely.

Perhaps an argument is to say that they should "back to back" the staircasing and the onwards sale, so that these happen at the same time.  HMRC accept in practice that a form of subsale relief (pre completion transaction relief) can apply in such cases.  That could then relieve the staircasing leg of the transaction and wipe out your stamp duty land tax liability.

This is assuming that the property is in England, different rules apply elsewhere.

eddddy

Could it be the Housing Association rules - rather that the choice of the Building Society?

i.e. The Building Society is wanting to sell the property - and the Housing Association rules allow the Housing Association to insist that the property is sold as 100% ownership, with the seller paying the relevant stamp duty. 

And the Building Society are just passing that information on to you.


Maybe contact the Housing Association directly, and ask them what their resale rules are, and/or take a look at the documentation you got when you bought.