Is Stamp Duty payable?

factor29

Me and partner are buying out there ex after a lengthy divorce process, part funded by existing equity/the rest by mortgage. 
Ex is keeping 2 rental properties that are currently in joint names, but will be transferred solely to them prior to the transfer of the house we live in. This is also a condition of the mortgage offer. We will not own any other property at the point of equity transfer. 

We're using the mortgage companies conveyancers, and 2 months in theyve landed on us today we will be liable for the 3% additional property surcharge on Stamp Duty.

However, the forms we've signed say there is no stamp duty payable where a court order is valid. 

Can anyone confirm? 

SDLT_Geek

factor29 said:

Me and partner are buying out there ex after a lengthy divorce process, part funded by existing equity/the rest by mortgage. 
Ex is keeping 2 rental properties that are currently in joint names, but will be transferred solely to them prior to the transfer of the house we live in. This is also a condition of the mortgage offer. We will not own any other property at the point of equity transfer. 

We're using the mortgage companies conveyancers, and 2 months in theyve landed on us today we will be liable for the 3% additional property surcharge on Stamp Duty.

However, the forms we've signed say there is no stamp duty payable where a court order is valid. 

Can anyone confirm? 

Is the property in England, so the stamp duty concerned is stamp duty land tax (SDLT)?  That sounds likely, given that you refer to a 3% surcharge.

There is an exemption from SDLT for a transfer on divorce (or even in contemplation of divorce), but that only applies where the transfer is between the two parties to the marriage.  Your involvement as a joint purchaser will mean the exemption does not apply.

The amount of SDLT due will depend on what you are both paying and perhaps on the amount of the existing mortgage. If neither of you have other property interests then it seems highly unlikely that the extra 3% SDLT will apply.  Without the extra 3%, there would be no SDLT if the "chargeable consideration" is £250,000 or less.

factor29

SDLT_Geek said:

factor29 said:

Me and partner are buying out there ex after a lengthy divorce process, part funded by existing equity/the rest by mortgage. 
Ex is keeping 2 rental properties that are currently in joint names, but will be transferred solely to them prior to the transfer of the house we live in. This is also a condition of the mortgage offer. We will not own any other property at the point of equity transfer. 

We're using the mortgage companies conveyancers, and 2 months in theyve landed on us today we will be liable for the 3% additional property surcharge on Stamp Duty.

However, the forms we've signed say there is no stamp duty payable where a court order is valid. 

Can anyone confirm? 

Is the property in England, so the stamp duty concerned is stamp duty land tax (SDLT)?  That sounds likely, given that you refer to a 3% surcharge.

There is an exemption from SDLT for a transfer on divorce (or even in contemplation of divorce), but that only applies where the transfer is between the two parties to the marriage.  Your involvement as a joint purchaser will mean the exemption does not apply.

The amount of SDLT due will depend on what you are both paying and perhaps on the amount of the existing mortgage. If neither of you have other property interests then it seems highly unlikely that the extra 3% SDLT will apply.  Without the extra 3%, there would be no SDLT if the "chargeable consideration" is £250,000 or less.

Sorry yes its England. 

I'm purchasing 10% of the property, which is significantly below SDLT consideration. Mortgage is around 100k, so again below SDLT consideration. 

Overall the house price is over the SDLT threshold, but as you say there is no additional property so certainly no additional property surcharge. 

On what basis would any potential SDLT be charged on the overall property price, considering my small stake in the property? As no mention of this has been made - purely the additional rate. 

SDLT_Geek

factor29 said:

SDLT_Geek said:

factor29 said:

Me and partner are buying out there ex after a lengthy divorce process, part funded by existing equity/the rest by mortgage. 
Ex is keeping 2 rental properties that are currently in joint names, but will be transferred solely to them prior to the transfer of the house we live in. This is also a condition of the mortgage offer. We will not own any other property at the point of equity transfer. 

We're using the mortgage companies conveyancers, and 2 months in theyve landed on us today we will be liable for the 3% additional property surcharge on Stamp Duty.

However, the forms we've signed say there is no stamp duty payable where a court order is valid. 

Can anyone confirm? 

Is the property in England, so the stamp duty concerned is stamp duty land tax (SDLT)?  That sounds likely, given that you refer to a 3% surcharge.

There is an exemption from SDLT for a transfer on divorce (or even in contemplation of divorce), but that only applies where the transfer is between the two parties to the marriage.  Your involvement as a joint purchaser will mean the exemption does not apply.

The amount of SDLT due will depend on what you are both paying and perhaps on the amount of the existing mortgage. If neither of you have other property interests then it seems highly unlikely that the extra 3% SDLT will apply.  Without the extra 3%, there would be no SDLT if the "chargeable consideration" is £250,000 or less.

Sorry yes its England. 

I'm purchasing 10% of the property, which is significantly below SDLT consideration. Mortgage is around 100k, so again below SDLT consideration. 

Overall the house price is over the SDLT threshold, but as you say there is no additional property so certainly no additional property surcharge. 

On what basis would any potential SDLT be charged on the overall property price, considering my small stake in the property? As no mention of this has been made - purely the additional rate. 

The size of your stake makes no difference here.  The SDLT is worked out on the basis of a single purchase by joint buyers.

factor29

SDLT_Geek said:

factor29 said:

SDLT_Geek said:

factor29 said:

Me and partner are buying out there ex after a lengthy divorce process, part funded by existing equity/the rest by mortgage. 
Ex is keeping 2 rental properties that are currently in joint names, but will be transferred solely to them prior to the transfer of the house we live in. This is also a condition of the mortgage offer. We will not own any other property at the point of equity transfer. 

We're using the mortgage companies conveyancers, and 2 months in theyve landed on us today we will be liable for the 3% additional property surcharge on Stamp Duty.

However, the forms we've signed say there is no stamp duty payable where a court order is valid. 

Can anyone confirm? 

Is the property in England, so the stamp duty concerned is stamp duty land tax (SDLT)?  That sounds likely, given that you refer to a 3% surcharge.

There is an exemption from SDLT for a transfer on divorce (or even in contemplation of divorce), but that only applies where the transfer is between the two parties to the marriage.  Your involvement as a joint purchaser will mean the exemption does not apply.

The amount of SDLT due will depend on what you are both paying and perhaps on the amount of the existing mortgage. If neither of you have other property interests then it seems highly unlikely that the extra 3% SDLT will apply.  Without the extra 3%, there would be no SDLT if the "chargeable consideration" is £250,000 or less.

Sorry yes its England. 

I'm purchasing 10% of the property, which is significantly below SDLT consideration. Mortgage is around 100k, so again below SDLT consideration. 

Overall the house price is over the SDLT threshold, but as you say there is no additional property so certainly no additional property surcharge. 

On what basis would any potential SDLT be charged on the overall property price, considering my small stake in the property? As no mention of this has been made - purely the additional rate. 

The size of your stake makes no difference here.  The SDLT is worked out on the basis of a single purchase by joint buyers.

Just reading up on some examples on the gov website. 

So SDLT would be charged on the 'chargeable consideration' - from what I can understand, this would be any 'cash payments' changing hands between the divorcees, plus 50% of the outstanding mortgage. This would still be below the SDLT threshold.

Am I understanding that correctly? 

So made up example figures, house price of £400k, leaving party pays £50k as part of divorce, and mortgage outstanding is £200k. This would make the chargeable consideration £150k if I'm understanding right. 

If so, there should definitely be no SDLT to pay. 

SDLT_Geek

factor29 said:

SDLT_Geek said:

factor29 said:

SDLT_Geek said:

factor29 said:

Me and partner are buying out there ex after a lengthy divorce process, part funded by existing equity/the rest by mortgage. 
Ex is keeping 2 rental properties that are currently in joint names, but will be transferred solely to them prior to the transfer of the house we live in. This is also a condition of the mortgage offer. We will not own any other property at the point of equity transfer. 

We're using the mortgage companies conveyancers, and 2 months in theyve landed on us today we will be liable for the 3% additional property surcharge on Stamp Duty.

However, the forms we've signed say there is no stamp duty payable where a court order is valid. 

Can anyone confirm? 

Is the property in England, so the stamp duty concerned is stamp duty land tax (SDLT)?  That sounds likely, given that you refer to a 3% surcharge.

There is an exemption from SDLT for a transfer on divorce (or even in contemplation of divorce), but that only applies where the transfer is between the two parties to the marriage.  Your involvement as a joint purchaser will mean the exemption does not apply.

The amount of SDLT due will depend on what you are both paying and perhaps on the amount of the existing mortgage. If neither of you have other property interests then it seems highly unlikely that the extra 3% SDLT will apply.  Without the extra 3%, there would be no SDLT if the "chargeable consideration" is £250,000 or less.

Sorry yes its England. 

I'm purchasing 10% of the property, which is significantly below SDLT consideration. Mortgage is around 100k, so again below SDLT consideration. 

Overall the house price is over the SDLT threshold, but as you say there is no additional property so certainly no additional property surcharge. 

On what basis would any potential SDLT be charged on the overall property price, considering my small stake in the property? As no mention of this has been made - purely the additional rate. 

The size of your stake makes no difference here.  The SDLT is worked out on the basis of a single purchase by joint buyers.

Just reading up on some examples on the gov website. 

So SDLT would be charged on the 'chargeable consideration' - from what I can understand, this would be any 'cash payments' changing hands between the divorcees, plus 50% of the outstanding mortgage. This would still be below the SDLT threshold.

Am I understanding that correctly? 

So made up example figures, house price of £400k, leaving party pays £50k as part of divorce, and mortgage outstanding is £200k. This would make the chargeable consideration £150k if I'm understanding right. 

If so, there should definitely be no SDLT to pay. 

I think you have understood correctly, so far as it goes.  There can be other forms of consideration between the parties, such as debts forgiven, or other assets given in part exchange.  These can be hard to identify and quantify in the context of splitting assets on a divorce.

Taking a house value of £400,000 and assuming the spouses started off with 50% shares, a "sense check" would suggest the chargeable consideration should be about £200,000 (so still below the SDLT threshold).  One would wonder why the outgoing spouse would accept only £50K cash when their share of equity is £100K.  Perhaps there is further chargeable consideration given, such as a release of a debt?

Either way, on those figures, the chargeable consideration seems to be below the usual threshold on those figures.

Both of you count as UK resident for SDLT purposes presumably?

factor29

SDLT_Geek said:

factor29 said:

SDLT_Geek said:

factor29 said:

SDLT_Geek said:

factor29 said:

Me and partner are buying out there ex after a lengthy divorce process, part funded by existing equity/the rest by mortgage. 
Ex is keeping 2 rental properties that are currently in joint names, but will be transferred solely to them prior to the transfer of the house we live in. This is also a condition of the mortgage offer. We will not own any other property at the point of equity transfer. 

We're using the mortgage companies conveyancers, and 2 months in theyve landed on us today we will be liable for the 3% additional property surcharge on Stamp Duty.

However, the forms we've signed say there is no stamp duty payable where a court order is valid. 

Can anyone confirm? 

Is the property in England, so the stamp duty concerned is stamp duty land tax (SDLT)?  That sounds likely, given that you refer to a 3% surcharge.

There is an exemption from SDLT for a transfer on divorce (or even in contemplation of divorce), but that only applies where the transfer is between the two parties to the marriage.  Your involvement as a joint purchaser will mean the exemption does not apply.

The amount of SDLT due will depend on what you are both paying and perhaps on the amount of the existing mortgage. If neither of you have other property interests then it seems highly unlikely that the extra 3% SDLT will apply.  Without the extra 3%, there would be no SDLT if the "chargeable consideration" is £250,000 or less.

Sorry yes its England. 

I'm purchasing 10% of the property, which is significantly below SDLT consideration. Mortgage is around 100k, so again below SDLT consideration. 

Overall the house price is over the SDLT threshold, but as you say there is no additional property so certainly no additional property surcharge. 

On what basis would any potential SDLT be charged on the overall property price, considering my small stake in the property? As no mention of this has been made - purely the additional rate. 

The size of your stake makes no difference here.  The SDLT is worked out on the basis of a single purchase by joint buyers.

Just reading up on some examples on the gov website. 

So SDLT would be charged on the 'chargeable consideration' - from what I can understand, this would be any 'cash payments' changing hands between the divorcees, plus 50% of the outstanding mortgage. This would still be below the SDLT threshold.

Am I understanding that correctly? 

So made up example figures, house price of £400k, leaving party pays £50k as part of divorce, and mortgage outstanding is £200k. This would make the chargeable consideration £150k if I'm understanding right. 

If so, there should definitely be no SDLT to pay. 

I think you have understood correctly, so far as it goes.  There can be other forms of consideration between the parties, such as debts forgiven, or other assets given in part exchange.  These can be hard to identify and quantify in the context of splitting assets on a divorce.

Taking a house value of £400,000 and assuming the spouses started off with 50% shares, a "sense check" would suggest the chargeable consideration should be about £200,000 (so still below the SDLT threshold).  One would wonder why the outgoing spouse would accept only £50K cash when their share of equity is £100K.  Perhaps there is further chargeable consideration given, such as a release of a debt?

Either way, on those figures, the chargeable consideration seems to be below the usual threshold on those figures.

Both of you count as UK resident for SDLT purposes presumably?

Yes both UK residents. 

Slightly more complicated than the figures I provided with the other houses etc but not sure those would be part of the calculation anyway? Especially where I'm concerned if that affects the duty. 

SDLT_Geek

factor29 said:

SDLT_Geek said:

factor29 said:

SDLT_Geek said:

factor29 said:

SDLT_Geek said:

factor29 said:

Me and partner are buying out there ex after a lengthy divorce process, part funded by existing equity/the rest by mortgage. 
Ex is keeping 2 rental properties that are currently in joint names, but will be transferred solely to them prior to the transfer of the house we live in. This is also a condition of the mortgage offer. We will not own any other property at the point of equity transfer. 

We're using the mortgage companies conveyancers, and 2 months in theyve landed on us today we will be liable for the 3% additional property surcharge on Stamp Duty.

However, the forms we've signed say there is no stamp duty payable where a court order is valid. 

Can anyone confirm? 

Is the property in England, so the stamp duty concerned is stamp duty land tax (SDLT)?  That sounds likely, given that you refer to a 3% surcharge.

There is an exemption from SDLT for a transfer on divorce (or even in contemplation of divorce), but that only applies where the transfer is between the two parties to the marriage.  Your involvement as a joint purchaser will mean the exemption does not apply.

The amount of SDLT due will depend on what you are both paying and perhaps on the amount of the existing mortgage. If neither of you have other property interests then it seems highly unlikely that the extra 3% SDLT will apply.  Without the extra 3%, there would be no SDLT if the "chargeable consideration" is £250,000 or less.

Sorry yes its England. 

I'm purchasing 10% of the property, which is significantly below SDLT consideration. Mortgage is around 100k, so again below SDLT consideration. 

Overall the house price is over the SDLT threshold, but as you say there is no additional property so certainly no additional property surcharge. 

On what basis would any potential SDLT be charged on the overall property price, considering my small stake in the property? As no mention of this has been made - purely the additional rate. 

The size of your stake makes no difference here.  The SDLT is worked out on the basis of a single purchase by joint buyers.

Just reading up on some examples on the gov website. 

So SDLT would be charged on the 'chargeable consideration' - from what I can understand, this would be any 'cash payments' changing hands between the divorcees, plus 50% of the outstanding mortgage. This would still be below the SDLT threshold.

Am I understanding that correctly? 

So made up example figures, house price of £400k, leaving party pays £50k as part of divorce, and mortgage outstanding is £200k. This would make the chargeable consideration £150k if I'm understanding right. 

If so, there should definitely be no SDLT to pay. 

I think you have understood correctly, so far as it goes.  There can be other forms of consideration between the parties, such as debts forgiven, or other assets given in part exchange.  These can be hard to identify and quantify in the context of splitting assets on a divorce.

Taking a house value of £400,000 and assuming the spouses started off with 50% shares, a "sense check" would suggest the chargeable consideration should be about £200,000 (so still below the SDLT threshold).  One would wonder why the outgoing spouse would accept only £50K cash when their share of equity is £100K.  Perhaps there is further chargeable consideration given, such as a release of a debt?

Either way, on those figures, the chargeable consideration seems to be below the usual threshold on those figures.

Both of you count as UK resident for SDLT purposes presumably?

Yes both UK residents. 

Slightly more complicated than the figures I provided with the other houses etc but not sure those would be part of the calculation anyway? Especially where I'm concerned if that affects the duty. 

Yes, I had forgotten the other houses.  An exchange of property interests causes a market value charge.  So it sounds as if the half share acquired will be charged at its market value, so on your example figures, the chargeable consideration would be £200,000.