Stamp Duty Land Tax (SDLT) vs Hopeful First Time Buyer with some 'investment shares' in properties

Hopeful_First_Time_Buyer

Hi everyone. I don't know if anyone has come across the below situation recently: 

1. Having invested a rather small amount (£5k) in Property Partner (now called London House Exchange), a UK vehicle/company allowing you to effectively own shares in residential and other type of properties around the UK, receive dividends from the shares, and/or trade them 

2. Trying to buy their first home in the UK and aiming to have a Stamp Duty Land Tax (SDLT) relief for 'first time buyers' as they never lived in a home they owned 

I'm looking into all legal definitions at the moment (and maybe need to reach out to a tax specialist soon) but wondering if effectively the UK property investment shares I own will sadly disqualify me as a 'first time buyer', leading to paying thousands of pounds in tax. I flag that the flat I'm trying to buy is in London, and is around £435k in offer value. Also, I made the Property Partner investment more than 5 years ago.

Many thanks - and sorry if this is already covered somehow in other parts of the blog! 

Kind regards, 

Hopeful First Time Buyer

user1977

Not quite sure what your "share" comprises legally, but even owning 100% of a property-owning company wouldn't be relevant for SDLT purposes when you buy as an individual. If you're actually registered as a joint owner of a property then things are different (though the value means still probably irrelevant).

Hopeful_First_Time_Buyer

user1977 said:

Not quite sure what your "share" comprises legally, but even owning 100% of a property-owning company wouldn't be relevant for SDLT purposes when you buy as an individual. If you're actually registered as a joint owner of a property then things are different (though the value means still probably irrelevant).

Many thanks, much appreciate your comment. Re the registration, I can currently locate the title deeds from the Property Partner (London House Exchange) website. The titles includes the proprietor, which is named as the SPV (Special Property Vehicle) for each building. So, it seems every property on the website is bought by the special investment vehicle, which enables buying or selling shares of the property (i.e. shares I own), while the building owner remains the 'SPV' rather than a named individual - but I'm reviewing further.

silvercar

Hopeful_First_Time_Buyer said:

user1977 said:

Not quite sure what your "share" comprises legally, but even owning 100% of a property-owning company wouldn't be relevant for SDLT purposes when you buy as an individual. If you're actually registered as a joint owner of a property then things are different (though the value means still probably irrelevant).

Many thanks, much appreciate your comment. Re the registration, I can currently locate the title deeds from the Property Partner (London House Exchange) website. The titles includes the proprietor, which is named as the SPV (Special Property Vehicle) for each building. So, it seems every property on the website is bought by the special investment vehicle, which enables buying or selling shares of the property (i.e. shares I own), while the building owner remains the 'SPV' rather than a named individual - but I'm reviewing further.

Exactly as you have described. Even if you 100% owned a company and that company 100% a property, you as an individual wouldn’t be a property owner of that property.

even if the above wasn’t true, SDLT looks at property owned above £40k.

Hopeful_First_Time_Buyer

silvercar said:

Hopeful_First_Time_Buyer said:

user1977 said:

Not quite sure what your "share" comprises legally, but even owning 100% of a property-owning company wouldn't be relevant for SDLT purposes when you buy as an individual. If you're actually registered as a joint owner of a property then things are different (though the value means still probably irrelevant).

Many thanks, much appreciate your comment. Re the registration, I can currently locate the title deeds from the Property Partner (London House Exchange) website. The titles includes the proprietor, which is named as the SPV (Special Property Vehicle) for each building. So, it seems every property on the website is bought by the special investment vehicle, which enables buying or selling shares of the property (i.e. shares I own), while the building owner remains the 'SPV' rather than a named individual - but I'm reviewing further.

Exactly as you have described. Even if you 100% owned a company and that company 100% a property, you as an individual wouldn’t be a property owner of that property.

even if the above wasn’t true, SDLT looks at property owned above £40k.

Thanks a lot. I understand that likely there's no issue then, I can still qualify as a first time buyer and benefit from the relief! 

theartfullodger

Re """  Having invested a rather small amount (£5k) in Property Partner (now called London House Exchange)  """"

In your shoes I'd look at the reviews on them on commonly used review sites... Interesting reading.

And their comments at the top of the page also...
https://help.londonhouseexchange.com/hc/en-us/categories/360000278074-Regulation-Policies

Bookworm105

you own shares in a company
the fact the company owns a freehold property is irrelevant 

you remain a first time buyer 

SDLT_Geek

silvercar said:

Hopeful_First_Time_Buyer said:

user1977 said:

Not quite sure what your "share" comprises legally, but even owning 100% of a property-owning company wouldn't be relevant for SDLT purposes when you buy as an individual. If you're actually registered as a joint owner of a property then things are different (though the value means still probably irrelevant).

Many thanks, much appreciate your comment. Re the registration, I can currently locate the title deeds from the Property Partner (London House Exchange) website. The titles includes the proprietor, which is named as the SPV (Special Property Vehicle) for each building. So, it seems every property on the website is bought by the special investment vehicle, which enables buying or selling shares of the property (i.e. shares I own), while the building owner remains the 'SPV' rather than a named individual - but I'm reviewing further.

Exactly as you have described. Even if you 100% owned a company and that company 100% a property, you as an individual wouldn’t be a property owner of that property.

even if the above wasn’t true, SDLT looks at property owned above £40k.

This is mostly true, though for first time buyers' relief there is no £40,000 threshold.

As you say, owning shares in a limited company is not equated to having a share in a property for SDLT purposes, so having the shares in the SPV would not impact on first time buyers' relief for SDLT.