Who is responsible for calculating Stamp Duty (Shared Ownership)

Hampshirehels

Daughter bought 45% of SO house 3.5 yrs ago, when threshold was £125k.  House value £245K, her share £110k approx.  In any case, no stamp duty due.  She is now looking to staircase to 100% and obtain the freehold.

Solicitor has said they will only handle the Stamp Duty return to HMRC - not the calculation of the Stamp Duty due - and have advised her to seek advice from a tax advisor.

Our historic experience is that solicitors have always handled all issues relating to Stamp duty whilst conveyancing.  Have things changed??   Is this usual ??  How do we ensure she only pays what is due and doesn't overpay ? And what are they actually providing for £2230 ?

SDLT_Geek

Hampshirehels said:

Daughter bought 45% of SO house 3.5 yrs ago, when threshold was £125k.  House value £245K, her share £110k approx.  In any case, no stamp duty due.  She is now looking to staircase to 100% and obtain the freehold.

Solicitor has said they will only handle the Stamp Duty return to HMRC - not the calculation of the Stamp Duty due - and have advised her to seek advice from a tax advisor.

Our historic experience is that solicitors have always handled all issues relating to Stamp duty whilst conveyancing.  Have things changed??   Is this usual ??  How do we ensure she only pays what is due and doesn't overpay ? And what are they actually providing for £2230 ?

After the Angela Rayner debacle, conveyancers are even more cautious about giving complex SDLT advice.

Hampshirehels

I need to correct the Stamp Duty threshold in my original post.  At the time she bought her 45% share the threshold was £250k.So both her share and the market value were below the threshold.

I had also thought this may have been because of the Rayner affair. But if conveyancers won't calculate it, do you have to do it yourself and deal direct with HMRC ?

SDLT_Geek

Hampshirehels said:

I need to correct the Stamp Duty threshold in my original post.  At the time she bought her 45% share the threshold was £250k.So both her share and the market value were below the threshold.

I had also thought this may have been because of the Rayner affair. But if conveyancers won't calculate it, do you have to do it yourself and deal direct with HMRC ?

Did your daughter buy from the social landlord, taking the grant of a new lease?

If so, then if your daughter was well advised at the time, she would have elected to have paid SDLT on the market value of the property (the SDLT would have been nil, as the market value would be within the threshold) and there would be no more SDLT to pay now on staircasing out.

On the other hand, if your daughter bought from an existing lessee, the analysis is a bit different:
(a)  Perhaps when the lease was originally taken the market value election was made, so no SDLT would be due on staircasing out.
(b)  If the election was not made, then SDLT could be due now, but I would not expect it to be much, as the staircasing transaction here would not be linked to earlier transactions, but SDLT would be calculated on a "stand alone" basis.  For example, if your daughter pays £140K to staircase out, the SDLT would be £300.

If the solicitors will not advise on the calculation, your daughter will need to work it out without them, possibly researching it herself, or with your help, or with the help of an SDLT specialist, and / or with some help from HMRC's SDLT Helpline.  The solicitors are saying that they will submit the return, once the daughter has calculated the SDLT.

Hampshirehels

Many thanks - don't we also have to calculate Net Present Value since she is going from leasehold to freehold ?

SDLT_Geek

Hampshirehels said:

Many thanks - don't we also have to calculate Net Present Value since she is going from leasehold to freehold ?

No.  That can be relevant on the grant of a new lease.