Stamp duty second home confusion

Hodge123

Good morning. My partner and I want to buy our first home. She inherited 3/8s of her grandfathers home in Germany (she is German) it’s currently rented out and she receives 3/8s of the rent.
We live and work in UK and want to buy our first home. We have found a property for 250,000. I have used many different stamp duty calculators but they all say different amounts;
15,000 7,500 or 2,500. 

The house in Germany was never her main home. 

HMRC says we only receive relief if the new house is our main residence AND our old main residence is sold. But we’ve never had a main residence as we have always rented. 

Obviously the amounts are very different and before we start to think about making an offer we would like to be confident which amount is correct.
many thanks in advance.

Voyager2002

I suggest you ask your Estate Agent.

Does she declare the income from the German property to HMRC (perhaps through self-assessment)? 

RAS

If the value of your partner's share of the German House exceeds £40k, then she and you jointly will have to pay the second home premium for SDLT.

In England, there are situations where the donor can leave their share of a house to someone (often their children) but the beneficial interest remains with the other owner of the house. This is an Immediate Post Death Interest trust, and one advantage is that it does not affect first time buyer status. But those beneficiaries would not be receiving rental income.

Keep_pedalling

You don’t say what part of the UK you are in but assuming England you will be looking at an additional 5% SDLT if you buy jointly. As she is not a first time buyer you would pay £2,500 in standard SDLT, so £15,000 total. 

You can avoid the additional SDLT if she sells her share in the German house first or if you can buy in your name only your name you would pay no SDLT at all on a house of that value as you are still a first time buyer. I assume by partner you mean you are not married or in a civil partnership.

user1977

How is her interest in the German property held i.e. is her share registered in her own name as an individual, or is it perhaps in some sort of trust and she gets a share of the income? If the latter then it probably isn't relevant for SDLT purposes.

Hodge123

Thank you all for taking the time to reply
We are England,
The house share exceeds £40k
The house share is owned by the individuals, not a company.
She could not sell her share of the house, the other parties do not have enough to buy out, and none others are interested in selling currently. 
I could not get a mortgage large enough to buy on my own.
We own our own business here in the U.K. and her German income is declared via self assessment.
our Estate Agent said he has no clue as it’s a more complicated than normal case! 
It looks unfortunately like we will have to save up another £15,000 before we can buy, best get the kettle on and replan! 

SDLT_Geek

Hodge123 said:

Thank you all for taking the time to reply
We are England,
The house share exceeds £40k
The house share is owned by the individuals, not a company.
She could not sell her share of the house, the other parties do not have enough to buy out, and none others are interested in selling currently. 
I could not get a mortgage large enough to buy on my own.
We own our own business here in the U.K. and her German income is declared via self assessment.
our Estate Agent said he has no clue as it’s a more complicated than normal case! 
It looks unfortunately like we will have to save up another £15,000 before we can buy, best get the kettle on and replan! 

You have had some helpful replies.  I have one point to add, about the three year rule for inherited interests.  If the house share was inherited in the last three years, then it does not "count against her" for the purposes of the 5% surcharge (though that rule does not help with first time buyers' relief).  There is guidance about it here: https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm09795