Having to pay additional stamp duty

Anx

Could I just remove myself from a title to save on stamp duty? 

I purchased a flat with my sister. It was always going to be her flat but she couldn't qualify for a mortgage, so I was added to the mortgage and title. I have been living there on and off for 7 years. I travel a lot for work.

I am now buying my own place. Would I need to pay additional stamp duty? I am assuming so.

Aside for paying £15k deposit &  the mortgage for a few months when she was unemployed, I haven't contributed to the purchase. 

The property is now mortgage free, thanks to a gift from an aunt.

My sister doesn't have any savings as she has a patchy employment history.

Could i just remove myself from the flat's title and save having to pay additional stamp duty?
I haven't owned an other property.

user1977

You can't "remove yourself", you could agree with your sister that you'll transfer your share to her. And if you do that before (or simultaneously with) your purchase, then yes, you'd pay the normal rate of SDLT (or equivalent) on your purchase.

Keep_pedalling

You would be gifting your share to your sister which could have CGT implications for you unless this has been your primary residence for the past 7 years which looks to be the case.

SDLT_Geek

Anx said:

Could I just remove myself from a title to save on stamp duty? 

I purchased a flat with my sister. It was always going to be her flat but she couldn't qualify for a mortgage, so I was added to the mortgage and title. I have been living there on and off for 7 years. I travel a lot for work.

I am now buying my own place. Would I need to pay additional stamp duty? I am assuming so.

Aside for paying £15k deposit &  the mortgage for a few months when she was unemployed, I haven't contributed to the purchase. 

The property is now mortgage free, thanks to a gift from an aunt.

My sister doesn't have any savings as she has a patchy employment history.

Could i just remove myself from the flat's title and save having to pay additional stamp duty?
I haven't owned an other property.

Would you buy a property in England, so the relevant stamp duty is stamp duty land tax and the relevant surcharge for additional properties is now 5%?

If you make a genuine "no strings attached" gift to your sister of all of your interest in the property, then I would not expect the extra 5% SDLT to apply to your purchase.  Was the gift from the aunt seen as a gift just to your sister, so it "makes sense" for you to pass to your sister any interest you have?  Is there a declaration of trust saying what your share is?

If in reality you expect to get something out of the property (for example if the gift from the aunt was really to both of you) then perhaps you could structure it that you are selling your share to your sister for the money you expect.  If your sister does not have the funds, then the agreed amount could be left outstanding as a loan, and perhaps secured by a mortgage. 

That "works" for the SDLT on your purchase, as you will no longer have a beneficial ownership in that property.  Your sister is making an "acquisition" for SDLT purposes, but there may well be nothing for her to pay, with the current £250,000 threshold (due to fall to £125,000 after the end of March 2025).

Bookworm105

having provided the deposit you have a beneficial (financial) interest in the property
you state you have lived there for over 7 years but travel "a lot". Do you truthfully have a financial interest in any other property whether UK or overseas? 
It is important that you are certain you can show it has been your only/main home since you paid towards it

SDLT - you will need to be removed from legal ownership of the property by transferring your "share" of the equity to sister. That will eliminate your exposure to additional rate SDLT and in practical terms means removing your name from the Land Registry records - plenty of posts on here cover how to DIY that, or just pay a conveyancer.  You will need to do that before you complete the purchase of your new home.

CGT - if you can show it was your main/only home then you will be entitled to Private Residence Relief which will fully offset your CGT liability on a property in which you have a beneficial interest. The point being you are now disposing of it by way of gift to sister and that triggers CGT. Irrespective of the fact no money changes hands - in tax terms you are "connected persons" (blood relatives) so specific CGT rules apply  to such gifts and the only way to eliminate that is to claim PRR against the whole of the gain .