Is there SDLT relief for FTB if the partner had a property in the past

stor

Hello,

I wondered if someone can help with this dilemma my friend is in and they're getting conflicting advice from solicitor and online. 

Person A & Person B are couples (not legally married). Person A has sold a property and wants to buy another for Person B. Person B will be the sole individual on the deed and contribute to some of the purchase price but majority of the funds will come from Person A. 

for clarity / context:
Person A previously owned a property but sold it to fund the property for Person B 
Person B has never owned a property alone/jointly 
They will both live in the property 
Deed will only have person B's name 

1) Does person B still qualify for first time buyer SDLT relief?

2) The fact that Person A is going to live in the property or is mostly paying for it make them have an underlying beneficial interest? 

Any help / advice would be much appreciated. thank you

Bookworm105

stor said:

2) The fact that Person A is going to live in the property or is mostly paying for it make them have an underlying beneficial interest? 

so person A is going to pay for an entire house and have no protection in place for their money since they are not married. Person A might regret their attempt at aiding of tax avoidance if that were truly the case.

really ?????

and to answer your Q:

• Joint borrower sole proprietor mortgage

  It may be possible to claim first-time buyers’ relief where the other joint borrower has no beneficial interest or right to occupy the property (where they would otherwise not be a first-time buyer). There are special rules applying when taking on a new lease for a flat.

• 
  

• Gifted deposit mortgage

  Assuming the person who is buying the house is receiving a true gifted deposit, and the donor will not appear on the title deeds or have any beneficial interest in the property, the buyer will be eligible to claim stamp duty relief.

SDLT_Geek

stor said:

Hello,

I wondered if someone can help with this dilemma my friend is in and they're getting conflicting advice from solicitor and online. 

Person A & Person B are couples (not legally married). Person A has sold a property and wants to buy another for Person B. Person B will be the sole individual on the deed and contribute to some of the purchase price but majority of the funds will come from Person A. 

for clarity / context:
Person A previously owned a property but sold it to fund the property for Person B 
Person B has never owned a property alone/jointly 
They will both live in the property 
Deed will only have person B's name 

1) Does person B still qualify for first time buyer SDLT relief?

2) The fact that Person A is going to live in the property or is mostly paying for it make them have an underlying beneficial interest? 

Any help / advice would be much appreciated. thank you

I share the healthy scepticism of @bookworm105.  It stretches credulity that Person A would "give away" that amount of money.

OP does not say whether there will be a mortgage.  If there is not, then there is a way in which Person A could gain some protection for their money without having a beneficial interest in the property.  Person A could lend Person B the money, with the loan being secured by a mortgage.  Person A would be in a similar position to a bank / building society (though with the added complication of expecting to live in the property).

Bookworm105

SDLT_Geek said:

I share the healthy scepticism of @bookworm105.  It stretches credulity that Person A would "give away" that amount of money.

OP does not say whether there will be a mortgage.  If there is not, then there is a way in which Person A could gain some protection for their money without having a beneficial interest in the property.  Person A could lend Person B the money, with the loan being secured by a mortgage.  Person A would be in a similar position to a bank / building society (though with the added complication of expecting to live in the property).

but unlike a bank, or the norm for a private loan, Person A would be in occupation of the property they "gave" their own money to purchase.

@SDLT_Geek I accept beneficial interest is normally considered as being "who gets the money". However, surely investing my own money to purchase the place I live in is such an obvious ploy SDLT rules must cover it somehow?

SDLT_Geek

Bookworm105 said:

SDLT_Geek said:

I share the healthy scepticism of @bookworm105.  It stretches credulity that Person A would "give away" that amount of money.

OP does not say whether there will be a mortgage.  If there is not, then there is a way in which Person A could gain some protection for their money without having a beneficial interest in the property.  Person A could lend Person B the money, with the loan being secured by a mortgage.  Person A would be in a similar position to a bank / building society (though with the added complication of expecting to live in the property).

but unlike a bank, Person A would be in occupation of the property they "invested" the money to purchase.

I accept beneficial interest is normally defined as who gets the money, but surely investing my own money to purchase the place I live in is such an obvious ploy SDLT rules must cover it somehow?

Good points.  It comes down to a matter of substance.  If the documentation is drawn as a loan with a mortgage and Person B entirely owning the property, is that genuine?  Or is it a sham and the reality is that Person A has a share in the property?

The reality of Person B wholly owning the property is that they could ask Person A to leave at any time (subject to what any living together agreement might say) and that the remedies of Person A in the event of a relationship breakdown would be under the terms of the loan agreement and the mortgage, not as a joint owner.

It is questionable whether a loan structure is really what Person A and Person B want.  Especially as in the OP it is stated that Person A wants to buy a property for Person B!!

horsewithnoname

Joint borrower sole proprietor plus a gifted deposit is perfectly possible, I did it. My friend got FTB stamp duty exemption and I have no claim on or interest in the house. 

You will need to have independent legal advice, and not all solicitors will do this, and be prepared to be treated like and idiot because you are perfectly happy to give away money that you don’t need and think would be better used to put a secure roof over someone’s head 🙄

stor

horsewithnoname said:

Joint borrower sole proprietor plus a gifted deposit is perfectly possible, I did it. My friend got FTB stamp duty exemption and I have no claim on or interest in the house. 

You will need to have independent legal advice, and not all solicitors will do this, and be prepared to be treated like and idiot because you are perfectly happy to give away money that you don’t need and think would be better used to put a secure roof over someone’s head 🙄

I should've mentioned that A is unwell with short life expectancy. You r right person A is being treated and judged as if they lost their mind 

Bookworm105

stor said:

horsewithnoname said:

Joint borrower sole proprietor plus a gifted deposit is perfectly possible, I did it. My friend got FTB stamp duty exemption and I have no claim on or interest in the house. 

You will need to have independent legal advice, and not all solicitors will do this, and be prepared to be treated like and idiot because you are perfectly happy to give away money that you don’t need and think would be better used to put a secure roof over someone’s head 🙄

I should've mentioned that A is unwell with short life expectancy. You r right person A is being treated and judged as if they lost their mind 

quick marriage might clarify the rationale?