Stamp Duty Transfer of Ownership

EssexHebridean

@SDLT_Geek would this not count as a transfer of equity as the OP and the ex currently own as JT’s? 🤔 

SDLT_Geek

EssexHebridean said:

@SDLT_Geek would this not count as a transfer of equity as the OP and the ex currently own as JT’s? 🤔 

Yes, I did suggest further up the thread that perhaps this could be structured as the transfer of beneficial interests, rather than a purchase of the whole property (after all, a 25% share is remaining where it is).  This is what I said:

"The SDLT would be different if it were possible to structure the transaction differently.  If it is done as your new partner buying the whole 50% share of your ex and a 25% share from you, so your new partner alone is the purchaser (presumably paying 75% of £220,000) then, on present rules it is arguable that no SDLT is payable, on the basis that your new partner is the only "purchaser" for SDLT."

Much depends on what structure the lender is happy with.

Islandguy

SDLT_Geek said:

EssexHebridean said:

@SDLT_Geek would this not count as a transfer of equity as the OP and the ex currently own as JT’s? 🤔 

Yes, I did suggest further up the thread that perhaps this could be structured as the transfer of beneficial interests, rather than a purchase of the whole property (after all, a 25% share is remaining where it is).  This is what I said:

"The SDLT would be different if it were possible to structure the transaction differently.  If it is done as your new partner buying the whole 50% share of your ex and a 25% share from you, so your new partner alone is the purchaser (presumably paying 75% of £220,000) then, on present rules it is arguable that no SDLT is payable, on the basis that your new partner is the only "purchaser" for SDLT."

Much depends on what structure the lender is happy with.

SDLT_Geek

Thanks, I did refer this to my solicitor and they have responded as follows:

"The question here is whether you as an existing freeholder owner can grant yourself a lease of a joint share of the lease for no consideration and are ignored in respect of the purchase" 

Do you understand what this means?, Is this what you have said above?

SDLT_Geek

Islandguy said:

SDLT_Geek said:

EssexHebridean said:

@SDLT_Geek would this not count as a transfer of equity as the OP and the ex currently own as JT’s? 🤔 

Yes, I did suggest further up the thread that perhaps this could be structured as the transfer of beneficial interests, rather than a purchase of the whole property (after all, a 25% share is remaining where it is).  This is what I said:

"The SDLT would be different if it were possible to structure the transaction differently.  If it is done as your new partner buying the whole 50% share of your ex and a 25% share from you, so your new partner alone is the purchaser (presumably paying 75% of £220,000) then, on present rules it is arguable that no SDLT is payable, on the basis that your new partner is the only "purchaser" for SDLT."

Much depends on what structure the lender is happy with.

SDLT_Geek

Thanks, I did refer this to my solicitor and they have responded as follows:

"The question here is whether you as an existing freeholder owner can grant yourself a lease of a joint share of the lease for no consideration and are ignored in respect of the purchase" 

Do you understand what this means?, Is this what you have said above?

You said in the first post that you and your ex own a flat.  I would expect you to hold that on a long lease together.  It sounds as if you also have the freehold.  But I would expect nearly all of the value to sit within the lease.  I do not see why changing around the shares in ownership of the lease need involve the grant of a new lease.

It should just be a matter of assigning shares in the beneficial ownership of the lease.

If the shares in the ownership of the freehold should be changed also (that is likely to be best) then that could be done too without the grant of a new lease.

Islandguy

SDLT_Geek said:

Islandguy said:

SDLT_Geek said:

EssexHebridean said:

@SDLT_Geek would this not count as a transfer of equity as the OP and the ex currently own as JT’s? 🤔 

Yes, I did suggest further up the thread that perhaps this could be structured as the transfer of beneficial interests, rather than a purchase of the whole property (after all, a 25% share is remaining where it is).  This is what I said:

"The SDLT would be different if it were possible to structure the transaction differently.  If it is done as your new partner buying the whole 50% share of your ex and a 25% share from you, so your new partner alone is the purchaser (presumably paying 75% of £220,000) then, on present rules it is arguable that no SDLT is payable, on the basis that your new partner is the only "purchaser" for SDLT."

Much depends on what structure the lender is happy with.

SDLT_Geek

Thanks, I did refer this to my solicitor and they have responded as follows:

"The question here is whether you as an existing freeholder owner can grant yourself a lease of a joint share of the lease for no consideration and are ignored in respect of the purchase" 

Do you understand what this means?, Is this what you have said above?

You said in the first post that you and your ex own a flat.  I would expect you to hold that on a long lease together.  It sounds as if you also have the freehold.  But I would expect nearly all of the value to sit within the lease.  I do not see why changing around the shares in ownership of the lease need involve the grant of a new lease.

It should just be a matter of assigning shares in the beneficial ownership of the lease.

If the shares in the ownership of the freehold should be changed also (that is likely to be best) then that could be done too without the grant of a new lease.

The solicitor is drawing up a new 999y leases on the 2 flats. Currently, the two flats are held under 1 freehold title (no leases) 

SDLT_Geek

Islandguy said:

SDLT_Geek said:

Islandguy said:

SDLT_Geek said:

EssexHebridean said:

@SDLT_Geek would this not count as a transfer of equity as the OP and the ex currently own as JT’s? 🤔 

Yes, I did suggest further up the thread that perhaps this could be structured as the transfer of beneficial interests, rather than a purchase of the whole property (after all, a 25% share is remaining where it is).  This is what I said:

"The SDLT would be different if it were possible to structure the transaction differently.  If it is done as your new partner buying the whole 50% share of your ex and a 25% share from you, so your new partner alone is the purchaser (presumably paying 75% of £220,000) then, on present rules it is arguable that no SDLT is payable, on the basis that your new partner is the only "purchaser" for SDLT."

Much depends on what structure the lender is happy with.

SDLT_Geek

Thanks, I did refer this to my solicitor and they have responded as follows:

"The question here is whether you as an existing freeholder owner can grant yourself a lease of a joint share of the lease for no consideration and are ignored in respect of the purchase" 

Do you understand what this means?, Is this what you have said above?

You said in the first post that you and your ex own a flat.  I would expect you to hold that on a long lease together.  It sounds as if you also have the freehold.  But I would expect nearly all of the value to sit within the lease.  I do not see why changing around the shares in ownership of the lease need involve the grant of a new lease.

It should just be a matter of assigning shares in the beneficial ownership of the lease.

If the shares in the ownership of the freehold should be changed also (that is likely to be best) then that could be done too without the grant of a new lease.

The solicitor is drawing up a new 999y leases on the 2 flats. Currently, the two flats are held under 1 freehold title (no leases) 

I expect your solicitor is keenly aware of the need to make sure that the lessee taking a replacement lease is the same as the lessee surrendering the old lease.  Failure to stick to that could mean large SDLT charges both on the freeholder and new lessee under the exchange rules if the conditions of the surrender and regrant "exemption" are not complied with. 

That "exemption" is referred to here https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm04100