First Time Buyer!! YES or NO?

Nickfirsttimebuyer

Hello,
I am buying my first flat in London & I need help regarding if I am considered a First Time Buyer or not. I have just started the process & received the solicitor documents to fill in. One of the documents is about Stamp Duty & mentions the below:

"You must tell us about jointly owned dwellings, inherited dwellings, and any dwellings held in trust where you are the beneficiary. The dwelling need not be in the UK. It can be anywhere in the world."

My father who lives in Greece owns a flat, however, he confirmed to me that my sister & I own 31% of this flat & he owns the rest. However, once he passes away the flat will belong to me & my sister 50-50. Am I considered a first-time buyer & what do I need to say to my solicitor? How much SD do I have to pay if I am a first-time buyer & how much if I am not? Does HMRC search for this data comprehensively & what is the risk if they find out?

I look forward to hearing back! 

Nick

Brie

You own property elsewhere therefore you are not a first time buyer.  No idea how they check this.

user1977

Nickfirsttimebuyer said:

what do I need to say to my solicitor? 

You tell your solicitor what you've told us, giving you're paying them for advice...

theartfullodger

Not first time buyer   Just be, as we know you will, entirely honest.

Of course countries exchange details if why people have in assets and income.  Dunno how thorough or prompt. 

badmemory

Is your part ownership registered properly would be my first question

SDLT_Geek

Nickfirsttimebuyer said:

Hello,
I am buying my first flat in London & I need help regarding if I am considered a First Time Buyer or not. I have just started the process & received the solicitor documents to fill in. One of the documents is about Stamp Duty & mentions the below:

"You must tell us about jointly owned dwellings, inherited dwellings, and any dwellings held in trust where you are the beneficiary. The dwelling need not be in the UK. It can be anywhere in the world."

My father who lives in Greece owns a flat, however, he confirmed to me that my sister & I own 31% of this flat & he owns the rest. However, once he passes away the flat will belong to me & my sister 50-50. Am I considered a first-time buyer & what do I need to say to my solicitor? How much SD do I have to pay if I am a first-time buyer & how much if I am not? Does HMRC search for this data comprehensively & what is the risk if they find out?

I look forward to hearing back! 

Nick

You position could be rather worse than not being a first time buyer.  If your 31% share is worth £40,000 or more, then an extra 3% SDLT would be due on your purchase.  You do not give us the price of the flat you are buying, but let us say it is £350,000.  The amounts of SDLT would be:

First time buyer: £0
Not a first time buyer, but no 3% extra: £5,000
With the 3% extra: £15,500

This is a money saving site, not a site for those evading taxes, so you should not be asking about the risk of HMRC finding out that you are deliberately underpaying tax.  It is criminal to evade tax.  Do not go there!

Nickfirsttimebuyer

@SDLT_Geek  thanks so much for your response.
The purchase price of the flat is £312,100.00. I have a few questions please:
1. How can I find the current worth of my share (I doubt it will be more than £40K but I need to double check)? I have an accountant in Greece so I guess I need to ask her? Where can I see the law re the share or a flat please?
2. Can you please help me understand the difference with & without the 3% extra SDLT? Both categories are not first time buyers?
3. SDLT & Stamp Duty is the same?
4. What are the steps I need to take to provide all the details to my solicitor?

Nickfirsttimebuyer

@badmemory yes I know from my accountant that everything is properly registered in the Greek tax system. Do you know if what @SDLT_Geek says re £40K of my 31% share is accurate? Where can I read about it please?

SDLT_Geek

Nickfirsttimebuyer said:

@badmemory yes I know from my accountant that everything is properly registered in the Greek tax system. Do you know if what @SDLT_Geek says re £40K of my 31% share is accurate? Where can I read about it please?

You can read about the 3% extra here: https://www.zoopla.co.uk/discover/buying/q-a-new-3-stamp-duty-surcharges/ or go to the HMRC guidance indexed here: https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm09730

If the 31% share is worth £40,000 or more, and you still have it when you complete the purchase in London, you are likely to be stuck with the 3% surcharge, as you will not count as "replacing your main residence", not having previously owned your own home.

If by any chance (though it does not sound like it, the way you describe it) your interest in the Greek property is subject to a usufruct (επικαρπία in Greek) in favour of your father, then the position might be better, but that is very complicated and often uncertain.

Nickfirsttimebuyer

@SDLT_Geek my father own the usufruct indeed & he is at the same time main owner of the flat of approx. 38% (waiting to confirm all these from my Greek accountant) & my sister & I own the 31% however after my father's death we will own 50%. How can I use this condition in that case then? I really appreciate your help!

SDLT_Geek

Nickfirsttimebuyer said:

@SDLT_Geek my father own the usufruct indeed & he is at the same time main owner of the flat of approx. 38% (waiting to confirm all these from my Greek accountant) & my sister & I own the 31% however after my father's death we will own 50%. How can I use this condition in that case then? I really appreciate your help!

Can you give us some rough numbers to work with please:
The price of the flat you are buying.
The overall value of the property in Greece.

That will help in identifying the issues you need help on.