SDLT again after a break up

RedRoverCA1

My partner and I bought our house in 2022, paying c.£60k SDLT. Unfortunately, we have broken up and I am buying her out; we are unmarried. We had a deed of trust in place to confirm our unequal share of our initial deposits.
I am astonished to find that as part of the buy-out, I now have another SDLT charge based on the buy-out cash consideration and 50% of the existing outstanding joint mortgage I am now taking on (I will become the 100% sole mortgage holder and home owner).
It seems I am being penalised for not being married and it is painful to pay yet more SDLT for the same property purchase! Do forum members know differently or have any suggestions?
Thanks.

Mark_d

This is nothing to do with your marital status.  It is because you had not purchased the property as joint tenants.

silvercar

Mark_d said:

This is nothing to do with your marital status.  It is because you had not purchased the property as joint tenants.

It is partly connected, as transfers between spouses are tax exempt.

silvercar

@RedRoverCA1, I’ll move this to the house buying board.

saajan_12

RedRoverCA1 said:

My partner and I bought our house in 2022, paying c.£60k SDLT. Unfortunately, we have broken up and I am buying her out; we are unmarried. We had a deed of trust in place to confirm our unequal share of our initial deposits.
I am astonished to find that as part of the buy-out, I now have another SDLT charge based on the buy-out cash consideration and 50% of the existing outstanding joint mortgage I am now taking on (I will become the 100% sole mortgage holder and home owner).
It seems I am being penalised for not being married and it is painful to pay yet more SDLT for the same property purchase! Do forum members know differently or have any suggestions?
Thanks.

Effectively you'd have paid half the SDLT (30k) to buy half a house. Now you're buying the other half, so you should pay the SDLT for that.. seems pretty fair. 

In fact this time you get the full the band allowances for that 50% share you're buying, while ex will have to pay 100%  of the SDLT if / when they buy a new property, so you're probably come off quite well. 

Re the rules for marriage - theres several differences not just this, some come out better, some come out worse if you're married. Is what it is. 

SDLT_Geek

silvercar said:

Mark_d said:

This is nothing to do with your marital status.  It is because you had not purchased the property as joint tenants.

It is partly connected, as transfers between spouses are tax exempt.

To be picky, this is correct in its context: in the context of a divorce then usually there is an exemption for SDLT for transfers between spouses.

SDLT_Geek

RedRoverCA1 said:

My partner and I bought our house in 2022, paying c.£60k SDLT. Unfortunately, we have broken up and I am buying her out; we are unmarried. We had a deed of trust in place to confirm our unequal share of our initial deposits.
I am astonished to find that as part of the buy-out, I now have another SDLT charge based on the buy-out cash consideration and 50% of the existing outstanding joint mortgage I am now taking on (I will become the 100% sole mortgage holder and home owner).
It seems I am being penalised for not being married and it is painful to pay yet more SDLT for the same property purchase! Do forum members know differently or have any suggestions?
Thanks.

Yes, this is painful.  SDLT works on the basis of taxing transactions, so successive transactions for the same property can each be liable to SDLT.

I wonder if the £60,000 paid on the 2022 purchase included the 3% extra for additional properties?  The surcharge for additional properties is now 5%.  If you might otherwise face the extra 5% (if you have other property interests) then there is a rule which might help you.  It switches off the 5% surcharge for "enlarging" an interest.  You must start with at least a 25% share and have lived in the property throughout all of the last three years to benefit from the rule.

RedRoverCA1

Mark_d said:

This is nothing to do with your marital status.  It is because you had not purchased the property as joint tenants.

Thanks but not so. We were tenants in common, with a Deed of Trust but whether TiC or JTs, it doesn't matter, apparently.

RedRoverCA1

saajan_12 said:

RedRoverCA1 said:

My partner and I bought our house in 2022, paying c.£60k SDLT. Unfortunately, we have broken up and I am buying her out; we are unmarried. We had a deed of trust in place to confirm our unequal share of our initial deposits.
I am astonished to find that as part of the buy-out, I now have another SDLT charge based on the buy-out cash consideration and 50% of the existing outstanding joint mortgage I am now taking on (I will become the 100% sole mortgage holder and home owner).
It seems I am being penalised for not being married and it is painful to pay yet more SDLT for the same property purchase! Do forum members know differently or have any suggestions?
Thanks.

Effectively you'd have paid half the SDLT (30k) to buy half a house. Now you're buying the other half, so you should pay the SDLT for that.. seems pretty fair. 

In fact this time you get the full the band allowances for that 50% share you're buying, while ex will have to pay 100%  of the SDLT if / when they buy a new property, so you're probably come off quite well. 

Re the rules for marriage - theres several differences not just this, some come out better, some come out worse if you're married. Is what it is. 

Thanks but at original purchase we did not split the SDLT cost 50:50, more 90/10 based on affordability; that's one of the reasons 'paying again' is painful!

RedRoverCA1

SDLT_Geek said:

RedRoverCA1 said:

My partner and I bought our house in 2022, paying c.£60k SDLT. Unfortunately, we have broken up and I am buying her out; we are unmarried. We had a deed of trust in place to confirm our unequal share of our initial deposits.
I am astonished to find that as part of the buy-out, I now have another SDLT charge based on the buy-out cash consideration and 50% of the existing outstanding joint mortgage I am now taking on (I will become the 100% sole mortgage holder and home owner).
It seems I am being penalised for not being married and it is painful to pay yet more SDLT for the same property purchase! Do forum members know differently or have any suggestions?
Thanks.

Yes, this is painful.  SDLT works on the basis of taxing transactions, so successive transactions for the same property can each be liable to SDLT.

I wonder if the £60,000 paid on the 2022 purchase included the 3% extra for additional properties?  The surcharge for additional properties is now 5%.  If you might otherwise face the extra 5% (if you have other property interests) then there is a rule which might help you.  It switches off the 5% surcharge for "enlarging" an interest.  You must start with at least a 25% share and have lived in the property throughout all of the last three years to benefit from the rule.

Thanks but no other property transactions or ownership in our case.

Bookworm225

RedRoverCA1 said:

saajan_12 said:

RedRoverCA1 said:

My partner and I bought our house in 2022, paying c.£60k SDLT. Unfortunately, we have broken up and I am buying her out; we are unmarried. We had a deed of trust in place to confirm our unequal share of our initial deposits.
I am astonished to find that as part of the buy-out, I now have another SDLT charge based on the buy-out cash consideration and 50% of the existing outstanding joint mortgage I am now taking on (I will become the 100% sole mortgage holder and home owner).
It seems I am being penalised for not being married and it is painful to pay yet more SDLT for the same property purchase! Do forum members know differently or have any suggestions?
Thanks.

Effectively you'd have paid half the SDLT (30k) to buy half a house. Now you're buying the other half, so you should pay the SDLT for that.. seems pretty fair. 

In fact this time you get the full the band allowances for that 50% share you're buying, while ex will have to pay 100%  of the SDLT if / when they buy a new property, so you're probably come off quite well. 

Re the rules for marriage - theres several differences not just this, some come out better, some come out worse if you're married. Is what it is. 

Thanks but at original purchase we did not split the SDLT cost 50:50, more 90/10 based on affordability; that's one of the reasons 'paying again' is painful!

then that was a matter between the two of you, nothing to do with tax
you are not justified in crying that such a decision has "unfair" ramifications at a later date.