First time buyer - am I classified as such?

Will52

Hi all,

I am looking to buy in the next year but I am not 100% sure if I qualify for first-time buyer status. I have never bought a property in the UK or abroad, but I am one of three named trustees of a trust set up to administer my mother's house. Does this technically mean I am a homeowner? And, even if so, how would a mortgage lender/HMRC know that this is the case?

Thanks!

boots_babe

Gosh, what a harsh response! I don't think the post comes across that way at all. I read the OP, and actually thought I would be wondering the same in their position.

The fact that they are asking for advice here surely points to them not wanting to make a mistake with stamp duty? If they wanted to 'defraud' theyd just go ahead without trying to find out the facts.

OP I can't help you I'm sorry as I don't know, but hopefully someone more friendly will come along to advise you soon.

chanz4

No as the trust owns it

Albermarle

chanz4 said:

No as the trust owns it

That was also what I thought.

Neil49

In the circumstances you describe, you are a first time buyer. End of story. 

SDLT_Geek

boots_babe said:

Gosh, what a harsh response! I don't think the post comes across that way at all. I read the OP, and actually thought I would be wondering the same in their position.

The fact that they are asking for advice here surely points to them not wanting to make a mistake with stamp duty? If they wanted to 'defraud' theyd just go ahead without trying to find out the facts.

OP I can't help you I'm sorry as I don't know, but hopefully someone more friendly will come along to advise you soon.

Yes, sorry, not my usual style at all!  I must have been feeling a bit righteous when I replied before.  Leaving aside the follow up "even if so" question I can, to make amends, be more helpful on the main question.

There was an area of doubt as to SDLT first time buyers' relief in the case of people who hold the title to a residential property as trustee only, because in some sense they do hold a "major interest" in the property, within the meaning of the legislation.  The legislation is unclear, as is the official guidance https://www.gov.uk/government/publications/stamp-duty-land-tax-relief-for-first-time-buyers-guidance-note (which has been withdrawn anyway).  There was some helpful correspondence between HMRC and the Society of Tax and Estates Practitioners with letters dated 1 July 2022 and 2 March 2023.  HMRC confirmed that holding a property merely as trustee (with no beneficial interest) does not prevent that person from qualifying as a first time buyer when buying in their personal capacity.

It would be different if, under the terms of the trust, the person has a right to part of the income from the property, or a right to live in the property for life.

thundyuk

Trust owns it so no. First time buyer applies unless you own a property. FTB is a bit misleading really, it's more like "Are you an owner?" 

You're not, so you're okay. If you've set up the trust to avoid getting smashed by local authorities for care fair play as well.

Albermarle

You're not, so you're okay. If you've set up the trust to avoid getting smashed by local authorities for care fair play as well.

Firstly if it has been done for this reason, the local authority is within its rights to ignore the trust status and count the house value. It is called Deliberate Deprivation of Assets, and is anything but fair play.

Secondly it would not be sensible for someone with assets to throw themselves at the mercy of council funded care, especially as they are very strapped for cash and the quality and provision of adult social care is very variable.

Will52

Hi All,

Thanks for going to the effort to reply and giving the clarification, much appreciated.

The property was put into trust many years ago btw.