Loss of Stamp Duty discount for married couples

Khamp

Can someone please help me decipher the stamp duty rules for married couples? It seems this is very unknown as I'm in quite a unique situation that my solicitors haven't dealt with before. 

My wife co-owns a home with her Mum from before we were married- I have never lived in or contributed financially to this property.

I am looking to buy my first home on my own (my wife will not be on the mortgage or the deeds) and therefore expected to qualify for stamp duty relief as a first time buyer. 

However I found this on HMRC:

'If you’re married or in a civil partnership

The rules apply to you both as if you were buying the property together, even if you’re not.

If either of you individually have to pay the higher rates, you must pay the higher rates for the transaction as a whole (unless you’re permanently separated).'

Is this really the case? As this puts my stamp duty bill from £875 to £22,900 just because my wife owns a property already, even though she's not involved in the purchase of my new property? 

Elliott.T123

Unfortunately so, for SDLT purposes a married couple is basically treated as one entity.

p00hsticks

Khamp said:

Can someone please help me decipher the stamp duty rules for married couples? It seems this is very unknown as I'm in quite a unique situation that my solicitors haven't dealt with before. 

I'd be worrying out the competency of your solicitors. I - it's nowhere near a 'unique situation' and similar cases and queries crop up regularly on these boards

born_again

Afraid if you want 1st time buyer status. Then you are going to have to purchase it yourself.

Agree with the above. This is quite common.

p00hsticks

born_again said:

Afraid if you want 1st time buyer status. Then you are going to have to purchase it yourself.

As the OP says in their initial post, that won't work in relation to SDLT as their wife already owns a property and married couples are treated as a single entity, even if the properties are in separate individual names. 

SDLT_Geek

Khamp said:

Can someone please help me decipher the stamp duty rules for married couples? It seems this is very unknown as I'm in quite a unique situation that my solicitors haven't dealt with before. 

My wife co-owns a home with her Mum from before we were married- I have never lived in or contributed financially to this property.

I am looking to buy my first home on my own (my wife will not be on the mortgage or the deeds) and therefore expected to qualify for stamp duty relief as a first time buyer. 

However I found this on HMRC:

'If you’re married or in a civil partnership

The rules apply to you both as if you were buying the property together, even if you’re not.

If either of you individually have to pay the higher rates, you must pay the higher rates for the transaction as a whole (unless you’re permanently separated).'

Is this really the case? As this puts my stamp duty bill from £875 to £22,900 just because my wife owns a property already, even though she's not involved in the purchase of my new property? 

As others have said, your solicitors should be able to advise on this!!!

For the purpose of the 3% surcharge your purchase would be judged as if your spouse is also buying the property (even though she is not).  That means there are questions to ask, such as:

(a)  Is her share in the house she co-owns with her mother worth £40,000 or more?

(b)  Is there another property which your spouse has lived in within the last three years which has been sold (or otherwise disposed of)?

It sounds likely that the 3% extra will apply.

Surprisingly the first time buyer relief rules do not have provisions throwing spouses together, but there are provisions, which are likely to be relevant here, saying that if the 3% extra applies, first time buyers' relief does not apply.

Khamp

born_again said:

Afraid if you want 1st time buyer status. Then you are going to have to purchase it yourself.

Agree with the above. This is quite common.

I don't think you've read the original post. Even buying the property alone seems to qualify for the higher amount. 

user1977

born_again said:

Afraid if you want 1st time buyer status. Then you are going to have to purchase it yourself get divorced first.

Fixed that for you!

Khamp

p00hsticks said:

Khamp said:

Can someone please help me decipher the stamp duty rules for married couples? It seems this is very unknown as I'm in quite a unique situation that my solicitors haven't dealt with before. 

I'd be worrying out the competency of your solicitors. I - it's nowhere near a 'unique situation' and similar cases and queries crop up regularly on these boards

Apologies, I had searched extensively but not found a post regarding the same situation. 

Khamp

Elliott.T123 said:

Unfortunately so, for SDLT purposes a married couple is basically treated as one entity.

Thank you! 

Khamp

SDLT_Geek said:

Khamp said:

Can someone please help me decipher the stamp duty rules for married couples? It seems this is very unknown as I'm in quite a unique situation that my solicitors haven't dealt with before. 

My wife co-owns a home with her Mum from before we were married- I have never lived in or contributed financially to this property.

I am looking to buy my first home on my own (my wife will not be on the mortgage or the deeds) and therefore expected to qualify for stamp duty relief as a first time buyer. 

However I found this on HMRC:

'If you’re married or in a civil partnership

The rules apply to you both as if you were buying the property together, even if you’re not.

If either of you individually have to pay the higher rates, you must pay the higher rates for the transaction as a whole (unless you’re permanently separated).'

Is this really the case? As this puts my stamp duty bill from £875 to £22,900 just because my wife owns a property already, even though she's not involved in the purchase of my new property? 

As others have said, your solicitors should be able to advise on this!!!

For the purpose of the 3% surcharge your purchase would be judged as if your spouse is also buying the property (even though she is not).  That means there are questions to ask, such as:

(a)  Is her share in the house she co-owns with her mother worth £40,000 or more?

(b)  Is there another property which your spouse has lived in within the last three years which has been sold (or otherwise disposed of)?

It sounds likely that the 3% extra will apply.

Surprisingly the first time buyer relief rules do not have provisions throwing spouses together, but there are provisions, which are likely to be relevant here, saying that if the 3% extra applies, first time buyers' relief does not apply.

Thank you!