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Stamp Duty

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Hatechutney
Hatechutney Posts: 7 Forumite
Name Dropper First Post
edited 4 June 2024 at 12:43PM in House buying, renting & selling
Hi. My Father and his sister own a holiday house that was left to them years ago and has no mortgage on it. They are tenants in common. My Father kindly wants to gift me his half and my Aunt has agreed to sell me her half at half the market value of the whole house (as she currently has ownership of half). 
My question is about the Stamp Duty. Stamp  isn’t payable of gifts so I thought I would be paying on the purchase half only. However the solicitor seems to be saying the Stamp Duty would be on the full value of the house despite half of it being a gift. Thank you for any advice.  

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  • theartfullodger
    theartfullodger Posts: 15,707 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    edited 4 June 2024 at 11:06AM
    Dunno but think HMRC tax (all taxes) on market value, not what parties assert was paid (I'm not suggesting in your circumstances but that could be an obvious tax-avoidance fiddle).

    NB CGT must be declared and paid within 30 days (? 60?) of sale.  So get prepared early. Has anybody got legal costs from purchase and improvements costs (as opposed to repairs..) - usually claimable.  For CGT mortgage or not is irrelevant. 
  • So sorry. I meant stamp duty. Not capital gains tax. Bit new to all this! 😳
  • Hoenir
    Hoenir Posts: 7,742 Forumite
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    CGT is payable. While the transaction is indeed a gift. The disposal for nil consideration remains a taxable event for your father.  An obvious loophole that was filled many moons ago. 
  • p00hsticks
    p00hsticks Posts: 14,451 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    Hoenir said:
    CGT is payable. While the transaction is indeed a gift. The disposal for nil consideration remains a taxable event for your father.  An obvious loophole that was filled many moons ago. 
    But any CGT will need to be paid by father and aunt.
    The OP has since clarified that want they meant to query is their SDLT liability on the transaction. 
  • Keep_pedalling
    Keep_pedalling Posts: 20,910 Forumite
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    Despite no money changing hands, your father will have CGT to pay on the gain in value of his share based on the current full market. Your aunt will have the same amount to pay. 

    Depending on your father’s net worth it may be better for him to hold onto his share and pass it on after his death. That will avoid CGT but could impact the amount of IHT his estate may have to pay. Gifting it now could lead to a double whammy of having to pay CGT and IHT if he does not survive 7 years after making the gift.
  • user1977
    user1977 Posts: 17,859 Forumite
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    SDLT is based on the consideration (i.e. any money or equivalent changing hands). There is no SDLT on gifts (or discounted prices).
  • Hoenir
    Hoenir Posts: 7,742 Forumite
    1,000 Posts First Anniversary Name Dropper
    Hoenir said:
    CGT is payable. While the transaction is indeed a gift. The disposal for nil consideration remains a taxable event for your father.  An obvious loophole that was filled many moons ago. 
    But any CGT will need to be paid by father and aunt.

    Most likely overlooked. Hence being gifted. The Aunt at least is getting paid for her share so has the money to settle the tax bill. 
  • Bookworm105
    Bookworm105 Posts: 2,016 Forumite
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    edited 4 June 2024 at 1:04PM
    Hi. My Father and his sister own a holiday house that was left to them years ago and has no mortgage on it. They are tenants in common. My Father kindly wants to gift me his half and my Aunt has agreed to sell me her half at half the market value of the whole house (as she currently has ownership of half). 
    My question is about the Stamp Duty. Stamp  isn’t payable of gifts so I thought I would be paying on the purchase half only. However the solicitor seems to be saying the Stamp Duty would be on the full value of the house despite half of it being a gift. Thank you for any advice.  
    I would be concerned about the competency of the solicitor unless they know more than you have told us... (particularly as you clearly state there is no outstanding mortgage on the property)

    SDLT is payable on the chargeable consideration
    In your case, the money paid to aunt is, of course, consideration. SDLT would be due if that amount is above the SDLT threshold 

    Gifts are NOT chargeable consideration, point your solicitor at the section: "If you’re given property as a gift" 

    Stamp Duty Land Tax: transfer ownership of land or property - GOV.UK (www.gov.uk)



  • SDLT_Geek
    SDLT_Geek Posts: 2,897 Forumite
    Seventh Anniversary 1,000 Posts Name Dropper
    Hi. My Father and his sister own a holiday house that was left to them years ago and has no mortgage on it. They are tenants in common. My Father kindly wants to gift me his half and my Aunt has agreed to sell me her half at half the market value of the whole house (as she currently has ownership of half). 
    My question is about the Stamp Duty. Stamp  isn’t payable of gifts so I thought I would be paying on the purchase half only. However the solicitor seems to be saying the Stamp Duty would be on the full value of the house despite half of it being a gift. Thank you for any advice.  
    I agree with @Bookworm105.  

    Is the property in England, so the relevant stamp duty is stamp duty land tax?

    SDLT is due on the "chargeable consideration" which in this case I would expect to be the amount payable to the aunt.
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