Stamp Duty question

MrsAxlRose

Hi I’m currently selling my main residence and have purchased a replacement property for £435000.
My question relates to the fact that a few months ago my elderly parents signed their property over to me.
Does this mean that the house that I am purchasing to live in is considered a second property.
The rules state clearly that stamp duty only relates to a main residence but when I ask my estate agent and solicitor about this they seemed unsure as to whether or not I’ll have to pay the higher rate of Stamp Duty or not.
I rand the HMRC helpline and they were useless 

_Penny_Dreadful

MrsAxlRose said:

Hi I’m currently selling my main residence and have purchased a replacement property for £435000.
My question relates to the fact that a few months ago my elderly parents signed their property over to me.
Does this mean that the house that I am purchasing to live in is considered a second property.
The rules state clearly that stamp duty only relates to a main residence but when I ask my estate agent and solicitor about this they seemed unsure as to whether or not I’ll have to pay the higher rate of Stamp Duty or not.
I rand the HMRC helpline and they were useless 

You’re replacing your main residence therefore condition D is not met and the higher rate of SDLT does not apply. The fact your parents have signed their property over to you is irrelevant to your SDLT liability. 

I can understand an estate agent not understanding the legislation but it’s concerning that your solicitor doesn’t. 

saajan_12

MrsAxlRose said:

Hi I’m currently selling my main residence and have purchased a replacement property for £435000.
My question relates to the fact that a few months ago my elderly parents signed their property over to me.
Does this mean that the house that I am purchasing to live in is considered a second property.
The rules state clearly that stamp duty only relates to a main residence but when I ask my estate agent and solicitor about this they seemed unsure as to whether or not I’ll have to pay the higher rate of Stamp Duty or not.
I rand the HMRC helpline and they were useless 

No it doesn't only relate to main homes. 
However if you're replacing your main residence then that's an exception and you don't owe the higher rate stamp duty. 

Incidentally, why did the parents sign their property over? If its their main home where they continue to live then it won't help for inheritance tax planning if that's the idea. 

Keep_pedalling

Why on Earth did you parents do something as mad as that? It does not avoid IHT as it is classed as a gift with reservation, and if it is a scheme to avoid care costs look up deliberate deprivation of assets. All they have effectively done is risk their long term security which would be threatened by you pre deceasing them going bankrupt or getting divorced. 

user1977

…and give you a potential CGT bill…

Keep_pedalling

user1977 said:

…and give you a potential CGT bill…

I knew there was something I missed.

SDLT_Geek

_Penny_Dreadful said:

MrsAxlRose said:

Hi I’m currently selling my main residence and have purchased a replacement property for £435000.
My question relates to the fact that a few months ago my elderly parents signed their property over to me.
Does this mean that the house that I am purchasing to live in is considered a second property.
The rules state clearly that stamp duty only relates to a main residence but when I ask my estate agent and solicitor about this they seemed unsure as to whether or not I’ll have to pay the higher rate of Stamp Duty or not.
I rand the HMRC helpline and they were useless 

You’re replacing your main residence therefore condition D is not met and the higher rate of SDLT does not apply. The fact your parents have signed their property over to you is irrelevant to your SDLT liability. 

I can understand an estate agent not understanding the legislation but it’s concerning that your solicitor doesn’t. 

You can check that the conditions for the "replacement" rules are met by looking at the guidance from HMRC here: https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm09800

Hoenir

MrsAxlRose said:

I rand the HMRC helpline and they were useless 

HMRC are not a free advice centre. Did you fully understand the implications of being gifted the property before undertaking the transfer?