Paying stamp duty after completion

M47

Hey everyone, I am close to completing on the purchase of a property.

 I am using bridging financing to initially finance this.

 I am purchasing this property from a family member whom kindly agreed to gift me the stamp duty costs. However they would be gifting me these funds out of the money they receive, after the sale has gone through.

I had mentioned this to my conveyancer from the beginning, they seemed fine with it at the beginning, however right before we are ready to complete they are refusing to take this to completion unless I pay the stamp duty costs upfront.

My issue is that I don’t have these funds to hand.

They said that they would assume that the lender would make me pay the stamp duty upfront under a condition to lend. However this just doesn’t seem to make sense to me as I found this quote online

 “ When do I pay stamp duty? You have 14 days after you complete on the purchase of a property to file a return to HMRC and pay any stamp duty that is due. Your solicitor or conveyancer will usually calculate and pay your stamp duty bill on your behalf.”

 I just wanted to ask if my solicitor is seemingly being difficult? In insisting that I pay stamp duty upfront? Or if they could allow me to pay stamp duty within the 14 day time period as stated online.

 Thank you to anyone who can help advise on this.

user1977

Yes, completely standard that any lender will insist that the solicitor is able to submit and pay the SDLT at completion. Most lenders use the UK Lenders Handbook for their solicitors instructions - see condition 10.4:

https://lendershandbook.ukfinance.org.uk/lenders-handbook/englandandwales/#C8781

You're only going to be able to pay SDLT afterwards if you are making a cash purchase.

Also, does your lender know you're getting cash back from the vendor?

M47

Thank you for your reply. Maybe I should look for another avenue. 

Can I ask something else? My brother has offered to take out a loan against his car and would be willing to gift me the money.

However would this be an acceptable source of funds? As I would imagine that we’d have to be upfront about how the money was sourced.

propertyrental

The HMRC regulation is that SDLT must be paid to them (HMRC) within 14 days of Completion.

The bank's requirement (common for most lenders) is that you must pay their (usually also your) solicitor the funds for the SDLT before Completion, in order that they can guarantee meeting HMRC's deadline above.

As mentioned above, cash purchasers, with no lender involved, simply have to meet HMRC's deadline above. Buyers using a mortgage have to meet the lender's deadline.

But is this a mortgage? You describe it as 'bridging finance', so if it is simply an unsecured loan with no Charge against the property, then I don't see why the lender would have any interest in when, or indeed if, the SDLT were paid at all.