SDLT Query

Ruggers13

Apologies if this has been asked elsewhere on the forum. Looking online gives varying different answers, and also speaking to different tax advisors I receive different answers.

The query is that my partner who already owns and lets her property out is going to be added to my mortgage and deeds when I come to remortgage. There is going to be a declaration of trust that 30% of the property will be hers and the rest mine. Is the beneficial interest in the property and therefore the 3% SDLT surcharge calculated on 30% of the re-mortgage amount or something else?

SDLT_Geek

Ruggers13 said:

Apologies if this has been asked elsewhere on the forum. Looking online gives varying different answers, and also speaking to different tax advisors I receive different answers.

The query is that my partner who already owns and lets her property out is going to be added to my mortgage and deeds when I come to remortgage. There is going to be a declaration of trust that 30% of the property will be hers and the rest mine. Is the beneficial interest in the property and therefore the 3% SDLT surcharge calculated on 30% of the re-mortgage amount or something else?

The "chargeable consideration" is likely to be based on:

(a)  30% of the loan she is taking on and
(b)  Anything else of value she gives you for the 30% share, for example payments to reduce the mortgage, a cash payment to you, or promise of a cash payment.

It would be helpful to have more background.  You live together in the property?  What is it worth now?  What is the amount of the existing mortgage debt?  What will be the new mortgage debt?  Has she already made capital payments and will she, as part of obtaining the 30% share.

silvercar

It may be cheaper to marry, no tax on transfers between spouses.

pjs493

As silvercar mentioned. It would be easier if you were married in the situation. 

You don’t mention why you want to add her onto your property, so some more info, as much as you are happy to share, as to why you want to do this would be useful. 

My husband bought a flat in his early 20s when he first joined the Armed Forces, subsequent moves with his job meant the flat became a rental property because he was never posted back to the location of the flat. At one point we considered adding me to the deeds and mortgage so I could share the income the rental produced in order to avoid my husband pushing into the next tax bracket. 

We spoke to our financial advisor and he recommended that we don’t do that so I could retain my first time buyer status. He recommended my husband increase his pension contributions instead and take the opportunity between tenants to redecorate, etc (which could be offset against his tax bill).

my husband died suddenly and unexpectedly last year and I inherited his estate (barring a few small bequests he left in his Will). Rather than transfer the flat into my name, I’m selling it as an asset of the estate and I will inherit the proceeds. This means that when the purchase of my forever home goes through, it will not attract SDLT. 

All of that was to say, what benefit are you hoping to get by sharing the asset? What are the pros and cons of leaving things as they are and doing what you plan to do?

Ruggers13

Thanks for all of your replies.

To add some further context, the reason being is that my home is going to be considered the family home in the future. My partner would like to contribute towards the mortgage and therefore this should be reflected in the % ownership of the property. 

We currently live in the property together. She rents out her existing property. The value of my property is £320k with a £260k mortgage. Currently she has not made any capital repayments towards the current mortgage. We intend to split the future re-mortgage payments 70/30. 

The reason for the 70/30 split is equally split our assets. My house is of higher value so the 70/30 split would roughly be 50/50 in assets taking her current property into the equation. 

Ruggers13

SDLT_Geek said:

Ruggers13 said:

Apologies if this has been asked elsewhere on the forum. Looking online gives varying different answers, and also speaking to different tax advisors I receive different answers.

The query is that my partner who already owns and lets her property out is going to be added to my mortgage and deeds when I come to remortgage. There is going to be a declaration of trust that 30% of the property will be hers and the rest mine. Is the beneficial interest in the property and therefore the 3% SDLT surcharge calculated on 30% of the re-mortgage amount or something else?

The "chargeable consideration" is likely to be based on:

(a)  30% of the loan she is taking on and
(b)  Anything else of value she gives you for the 30% share, for example payments to reduce the mortgage, a cash payment to you, or promise of a cash payment.

It would be helpful to have more background.  You live together in the property?  What is it worth now?  What is the amount of the existing mortgage debt?  What will be the new mortgage debt?  Has she already made capital payments and will she, as part of obtaining the 30% share.

Just giving this thread a bump if you have anything further to say after the answers i provided? Thanks!

Bookworm105

Ruggers13 said:

SDLT_Geek said:

Ruggers13 said:

Apologies if this has been asked elsewhere on the forum. Looking online gives varying different answers, and also speaking to different tax advisors I receive different answers.

The query is that my partner who already owns and lets her property out is going to be added to my mortgage and deeds when I come to remortgage. There is going to be a declaration of trust that 30% of the property will be hers and the rest mine. Is the beneficial interest in the property and therefore the 3% SDLT surcharge calculated on 30% of the re-mortgage amount or something else?

The "chargeable consideration" is likely to be based on:

(a)  30% of the loan she is taking on and
(b)  Anything else of value she gives you for the 30% share, for example payments to reduce the mortgage, a cash payment to you, or promise of a cash payment.

It would be helpful to have more background.  You live together in the property?  What is it worth now?  What is the amount of the existing mortgage debt?  What will be the new mortgage debt?  Has she already made capital payments and will she, as part of obtaining the 30% share.

Just giving this thread a bump if you have anything further to say after the answers i provided? Thanks!

are you legally married to your partner?

Ruggers13

Bookworm105 said:

Ruggers13 said:

SDLT_Geek said:

Ruggers13 said:

Apologies if this has been asked elsewhere on the forum. Looking online gives varying different answers, and also speaking to different tax advisors I receive different answers.

The query is that my partner who already owns and lets her property out is going to be added to my mortgage and deeds when I come to remortgage. There is going to be a declaration of trust that 30% of the property will be hers and the rest mine. Is the beneficial interest in the property and therefore the 3% SDLT surcharge calculated on 30% of the re-mortgage amount or something else?

The "chargeable consideration" is likely to be based on:

(a)  30% of the loan she is taking on and
(b)  Anything else of value she gives you for the 30% share, for example payments to reduce the mortgage, a cash payment to you, or promise of a cash payment.

It would be helpful to have more background.  You live together in the property?  What is it worth now?  What is the amount of the existing mortgage debt?  What will be the new mortgage debt?  Has she already made capital payments and will she, as part of obtaining the 30% share.

Just giving this thread a bump if you have anything further to say after the answers i provided? Thanks!

are you legally married to your partner?

No I am not 

Bookworm105

Ruggers13 said:

Bookworm105 said:

Ruggers13 said:

SDLT_Geek said:

Ruggers13 said:

Apologies if this has been asked elsewhere on the forum. Looking online gives varying different answers, and also speaking to different tax advisors I receive different answers.

The query is that my partner who already owns and lets her property out is going to be added to my mortgage and deeds when I come to remortgage. There is going to be a declaration of trust that 30% of the property will be hers and the rest mine. Is the beneficial interest in the property and therefore the 3% SDLT surcharge calculated on 30% of the re-mortgage amount or something else?

The "chargeable consideration" is likely to be based on:

(a)  30% of the loan she is taking on and
(b)  Anything else of value she gives you for the 30% share, for example payments to reduce the mortgage, a cash payment to you, or promise of a cash payment.

It would be helpful to have more background.  You live together in the property?  What is it worth now?  What is the amount of the existing mortgage debt?  What will be the new mortgage debt?  Has she already made capital payments and will she, as part of obtaining the 30% share.

Just giving this thread a bump if you have anything further to say after the answers i provided? Thanks!

are you legally married to your partner?

No I am not 

then she is increasing the number of properties she owns, The fact it will be her main home is irrelevant for SDLT purposes.
She will incur the additional rate SDLT (now 5%) on the calculation as explained by the geek as it is based on the beneficial interest acquired (subject to the £40,000 minimum threshold of course)

MeteredOut

Ruggers13 said:

Bookworm105 said:

Ruggers13 said:

SDLT_Geek said:

Ruggers13 said:

Apologies if this has been asked elsewhere on the forum. Looking online gives varying different answers, and also speaking to different tax advisors I receive different answers.

The query is that my partner who already owns and lets her property out is going to be added to my mortgage and deeds when I come to remortgage. There is going to be a declaration of trust that 30% of the property will be hers and the rest mine. Is the beneficial interest in the property and therefore the 3% SDLT surcharge calculated on 30% of the re-mortgage amount or something else?

The "chargeable consideration" is likely to be based on:

(a)  30% of the loan she is taking on and
(b)  Anything else of value she gives you for the 30% share, for example payments to reduce the mortgage, a cash payment to you, or promise of a cash payment.

It would be helpful to have more background.  You live together in the property?  What is it worth now?  What is the amount of the existing mortgage debt?  What will be the new mortgage debt?  Has she already made capital payments and will she, as part of obtaining the 30% share.

Just giving this thread a bump if you have anything further to say after the answers i provided? Thanks!

are you legally married to your partner?

No I am not 

Does that mean you are illegally married to your partner?