Stamp duty question

kingofhearts14

This is quite complicated so will try and explain.
I have an interest in several homes.

Home 1 - Is where my ex-wife lives, we are legally divorced, she pays the mortgage on the property and has been for nearly 20 years. However both names are still on the mortgage and I assume the property deeds.

Home 2 - Is where I live. It is an inherited property from my parents, owned outright. Live here 30% of the time. Has just been sold and currently going through conveyancing process. It’s in my name only.

Home 3 - Is a rental property, I rent out, no mortgage, owned outright with current tenant paying the rent. It’s in my name only.

Home 4 - Is in my husbands (legally married in 2023) home, has a mortgage, but this will be paid off when selling it. Live here 70% of the time. It’s in his name only.

Question.

My husband and I want to buy our own home together. We won’t be buying it until home 2 is sold and I have the money in my account. 

I understand that we would have to pay the higher rate of stamp duty as although this would be our main home, his home (home 4) is still classed as our main home until it is sold, which we would do within the 3 years allowed and reclaim the higher rate of stamp duty difference back to us once it is sold. 

However what about Home 1? Is this still classed as my main home also? Or because I don’t live there and am legally divorced does it not count. Or will I have to get my name taken off the mortgage, so it’s in my ex wife’s name only? She’s been paying the mortgage since 2004 anyway. 

I’m thinking I would have to literally have no interest in the property at all and therefore transfer the whole property to her, which I don’t mind doing, so that it’s not classed as my main home or am I over thinking this?

Any thoughts?

RAS

You will be replacing your primary residence, so standard SDLT applies. Doesn't matter how many other houses you own.

But you might need to check on CGT with regard to home 2, if that's not been your primary residence?

Bookworm105

kingofhearts14 said:

This is quite complicated so will try and explain.
I have an interest in several homes.

Home 1 - Is where my ex-wife lives, we are legally divorced, she pays the mortgage on the property and has been for nearly 20 years. However both names are still on the mortgage and I assume the property deeds.

Home 2 - Is where I live. It is an inherited property from my parents, owned outright. Live here 30% of the time. Has just been sold and currently going through conveyancing process. It’s in my name only.

Home 3 - Is a rental property, I rent out, no mortgage, owned outright with current tenant paying the rent. It’s in my name only.

Home 4 - Is in my husbands (legally married in 2023) home, has a mortgage, but this will be paid off when selling it. Live here 70% of the time. It’s in his name only.

Question.

My husband and I want to buy our own home together. We won’t be buying it until home 2 is sold and I have the money in my account. 

I understand that we would have to pay the higher rate of stamp duty as although this would be our main home, his home (home 4) is still classed as our main home until it is sold, which we would do within the 3 years allowed and reclaim the higher rate of stamp duty difference back to us once it is sold. 

However what about Home 1? Is this still classed as my main home also? Or because I don’t live there and am legally divorced does it not count. Or will I have to get my name taken off the mortgage, so it’s in my ex wife’s name only? She’s been paying the mortgage since 2004 anyway. 

I’m thinking I would have to literally have no interest in the property at all and therefore transfer the whole property to her, which I don’t mind doing, so that it’s not classed as my main home or am I over thinking this?

Any thoughts?

given you appear to have remarried then #4 is the main home of both of you no matter what you try and argue re #1 

if #4 sells after purchase of #5 then you are correct, higher rate payable on purchase, but with prospect of a refund if #4 sold within 3 years. Nothing complex about that, all other properties effectively irrelevant in the context of sale of #4 and purchase of its replacement.
Note Standard rate as suggested in the post above will only apply if #4 sells on or before #5 purchase completes.

with the ongoing existence of #3 you as a married couple will always be exposed to higher rate unless a further purchase relates only to the replacement condition (ie main home sold before or on date of new purchase) no matter whose name is on the new purchase 

re CGT and #2, you are a remarried couple so you cannot claim to have separate main homes for CGT purposes no matter what you argue re split of time (#1 will also be exposed to CGT eventually since it well after the divorce and you have a new marital home in the meantime)

Sapindus

I would be very surprised if your ex-wife is still trundling on with a mortgage and title deeds which give you a half share in her house.  

savergrant

'However both names are still on the mortgage and I assume the property deeds.'

What was arranged in the divorce settlement? When my parents divorced my mum received a payment in relation to the equity on the house, my dad became solely responsible for making mortgage payments but the endowment policy insured both of their lives so if she died it would pay out.

If your ex-wife died who would own the house?

Bookworm105

Sapindus said:

I would be very surprised if your ex-wife is still trundling on with a mortgage and title deeds which give you a half share in her house.  

why? we have no idea what the divorce settlement entails. There may be a mesher order in place,

kingofhearts14

Re the divorce settlement.

My wife is still paying the mortgage, (she re-mortgaged with me still on the mortgage we are separated at this point) so she could buy me out. However I am still on the mortgage because the lender would probably not let her have a mortgage on her salary alone, even though she could comfortably afford it.

When we officially divorced several years later she rang the lender up and asked if could she take me off the mortgage. This was allowed providing I confirmed in writing etc. However because of the change it meant the rate she was on would change to a higher rate. She asked me if I didn’t mind still being on the mortgage to save her the rate change.
I said that’s fine as we are on good speaking terms and have always remained good friends. 

@Bookeorm 105
Thanks for the advice on CGT, realised this would have to be paid on properties #2 & #3, but forgot this would have to be paid on property #1 unless I am taken off mortgage etc if my ex-wife ever sells it. 

I will need to speak to her about this so she is aware and if she dies whilst the mortgage is still outstanding. 

It’s more for her sake than mine. The divorce just covered ourselves as a marital couple not the house. No children in the marriage. As it stands if she dies before me with the outstanding mortgage I guess the property becomes mine???? Thats not going to be popular either her family!! The property has a lot of equity also - so it’s quite a bit of money!! 

Bookworm105

. As it stands if she dies before me with the outstanding mortgage I guess the property becomes mine???? Thats not going to be popular either her family!! The property has a lot of equity also - so it’s quite a bit of money!! 

why do you think that?

who is on the mortgage has no relevance to who is the legal owner(s) of the property and thus who "takes over" ownership

either the property is legally owned as Joint Tenants (so last one standing, will utterly irrelevant) 
or it is legally owned as Tenants in Common (my will leaves my share to the cats and dogs home)

or if there is no will then law of intestacy applies (look it up)

GDB2222

You need to consider beneficial ownership. It sounds quite a lot like the divorce settlement gave the beneficial ownership of the home to the OP's ex-. The fact he's on the LR is irrelevant to that. SDLT is based on beneficial; ownership.