Stamp duty & Charge on a property

geoduke

Hi All

My partner and I just started (neively perhaps) looking for a new home.
We currently rent, but felt we could maybe save some money with a mortgage, what with how expensive rent is right now.

anyway, long (and it is long sorry) and short of it, is that I own a 50% share in a property already, that I inherited. I don't receive any benefits from it, the other share holder lives in the property and has no intention of selling, and can't afford to buy me out.

We just found out because of that aforementioned property, that we might have to pay the higher limit of stamp duty. this effectively kills our chance to get our own house.

I've spoken with a few solicitors, who say that if the new property is replacing my main residence (which it is) I should only pay the stamp duty on the new purchase (0 before april, £100 after), but I'd have to speak to an accountant to be sure as I could be charged the higher rate (around 7k).

I've spoken to a few accountants and they also seem to be fairly uncertain and one actually directed me back to a solicitor.

my financial advisor suggested signing over my stake in the property to the other stakeholder and putting a charge on the property for 50% of its value.
My concern with this is that, when the other stakeholder passes, what would this mean for the property.
They currently have their half going to their child, and I don't want them to have to sell the property (which they would intend to live in) to repay the debt on the house, and they also would not be able to afford to buy me out.

I don't really know what to do, both properties in question total under £300k combined, so it's not like I'm trying to accumulate a pot of gold.

I'm considering just giving my stake away, as I don't currently get anything for it and as previously stated the other owners next of kin will be living in it when they pass, the only thing stopping me atm is that I've been told I'll have to pay capital gains on the property, if it has gone up in value.

any help would be appreciated.

p00hsticks

geoduke said:

I've spoken with a few solicitors, who say that if the new property is replacing my main residence (which it is) I should only pay the stamp duty on the new purchase (0 before april, £100 after), but I'd have to speak to an accountant to be sure as I could be charged the higher rate (around 7k).

I'm sorry , but I don't think that's right, as you don't currently own your main residence and so will be increasing the number of properties that you own and therefore liable to pay the higher rate of SDLT.  

SDLT_Geek

geoduke said:

Hi All

My partner and I just started (neively perhaps) looking for a new home.
We currently rent, but felt we could maybe save some money with a mortgage, what with how expensive rent is right now.

anyway, long (and it is long sorry) and short of it, is that I own a 50% share in a property already, that I inherited. I don't receive any benefits from it, the other share holder lives in the property and has no intention of selling, and can't afford to buy me out.

We just found out because of that aforementioned property, that we might have to pay the higher limit of stamp duty. this effectively kills our chance to get our own house.

I've spoken with a few solicitors, who say that if the new property is replacing my main residence (which it is) I should only pay the stamp duty on the new purchase (0 before april, £100 after), but I'd have to speak to an accountant to be sure as I could be charged the higher rate (around 7k).

I've spoken to a few accountants and they also seem to be fairly uncertain and one actually directed me back to a solicitor.

my financial advisor suggested signing over my stake in the property to the other stakeholder and putting a charge on the property for 50% of its value.
My concern with this is that, when the other stakeholder passes, what would this mean for the property.
They currently have their half going to their child, and I don't want them to have to sell the property (which they would intend to live in) to repay the debt on the house, and they also would not be able to afford to buy me out.

I don't really know what to do, both properties in question total under £300k combined, so it's not like I'm trying to accumulate a pot of gold.

I'm considering just giving my stake away, as I don't currently get anything for it and as previously stated the other owners next of kin will be living in it when they pass, the only thing stopping me atm is that I've been told I'll have to pay capital gains on the property, if it has gone up in value.

any help would be appreciated.

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

If so, then you might be alright with the inherited property if you inherited a share not exceeding 50% within the last 3 years.  There is guidance on that here: https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm09795

The idea of "selling" your share in the inherited property and taking back a charge for the price left outstanding could in principle work for SDLT, but it is still as "disposal" for CGT purposes.