Stamp Duty Liability

treble3cc

I jointly own as tenants in common a property with my father and brother – the property has a mortgage which I have always paid in full.

I lived with my dad in the property from 2010 to 2021 when I moved to another house which is in my sole name.

My dad would like to assign his one third share to me with him remaining a legal owner and with no need to inform the mortgage company. This will be a “gift” so no money changing hands, although my Dad owes me quite a bit of money which I hope can be used in lieu of payment.

I’m not sure how to calculate the value of Dad’s share ie do we deduct the mortgage amount remaining and then divide by 3, or include the mortgage amount and divide by 3.

I don’t think my Dad will pay CGT as it’s his PPR.

The house was my PPR for 11 years from purchase so I’m not sure where I stand with Stamp Duty. My question is would I be liable for Stamp Duty on the Assigned share because I moved two years ago, and due to timing would I also pay 3% extra stamp duty on the assigned share.

Any help much appreciated.

Keep_pedalling

He can’t transfer his share to you and remain a legal owner. He would still be a beneficial owner as this is a gift with reservation of benefit.

I don’t think this would be classed as a gift if the transaction includes writing off his debt to you so I think SDLT may be applicable. 

treble3cc

Thank you.  I am honestly going round in circles.  My understanding is that Dad can do a Deed of Assignment to assign his beneficial share of our jointly owned property to me.  My brother will still have a one third beneficial share and I would end up with two thirds.  This would not "transfer legal ownership".  My dad, would still be legal owner but would not benefit financially from any sale.  He is considering using this route as, because the Legal Ownership would not change, we would not have to involve the mortgage company.  We have recently taken out a 10 year fixed rate mort with penalties.   
The transaction would not involve money and I am not sure whether "assigning" the one third share would be regarded as a gift, although I think it would.  
Does my time living at the property as my PPR count for nothing. If it doesn't then do I have to pay the extra 3% as I own another house. 
I'm finding it very complicated.

Jeremy535897

You currently own the property legally as three tenants in common. Your father would execute a declaration of trust to say he owned his third for you. The consideration would be one third of the mortgage for stamp duty. Points to note:
1. The third would remain in your father's estate for inheritance tax as it would be a gift with reservation.
2. Any future uplift in value on that third would not benefit from PPR, although your father would use PPR to eliminate tax on the gift, assuming he lived in it as his PPR throughout his ownership.
3. A solicitor should advise on whether the mortgage company would need to be informed, and would also have to deal with registering the arrangement with the Trust registration Service.
4. Did you not pay the higher rate of stamp duty when buying your current PPR since you retained part ownership of the house your father lives in?