Stamp duty and usufruct

IANPFNR

Hi, I was wondering if anyone might have experience with this, or insight they're willing to share.

I live in England permanently, currently renting.

I’m on the deeds of another property overseas (in the EU) as a bare owner, with my parents having usufruct rights for life, as it is their permanent residence. I’m not sure about the exact market value of the house but I believe is worth more than £40,000. There is no mortgage on the house.

Would I be obliged to pay the SDLT surcharge when buying a house in England?

I understand that the HMRC doesn’t have a fixed view on these things. 

There seem to be a lot of different opinions online for similar situations but hardly any actual experiences so it’s hard to guess what the outcome might be. But any help is welcome. 

Thanks so much!

IANPFNR

@SDLT_Geek ? 

SDLT_Geek

IANPFNR said:

Hi, I was wondering if anyone might have experience with this, or insight they're willing to share.

I live in England permanently, currently renting.

I’m on the deeds of another property overseas (in the EU) as a bare owner, with my parents having usufruct rights for life, as it is their permanent residence. I’m not sure about the exact market value of the house but I believe is worth more than £40,000. There is no mortgage on the house.

Would I be obliged to pay the SDLT surcharge when buying a house in England?

I understand that the HMRC doesn’t have a fixed view on these things. 

There seem to be a lot of different opinions online for similar situations but hardly any actual experiences so it’s hard to guess what the outcome might be. But any help is welcome. 

Thanks so much!

Usually the first thing is to check whether the property abroad would be a problem if you are treated as owning it. 

You have already checked about value and do not seem to be saved by the under £40,000 rule.  You the only bare owner?  It is not shared with a sibling or anyone else such that the shares (if you were treated as owning it) would each be worth under £40,000?

The next get out would be if, though currently renting, you had sold a property which you had lived in as your main residence within the last three years.  If so, then when buying a replacement main residence, it would not matter if you had other property interests.

If neither of those "get outs" works for you, it is a matter of getting comfortable that under the terms of the particular usufruct in your case and on the basis of the local law, your interest is equivalent of that to someone holding under an English trust subject to the rights of someone else under that trust to live in the property for life.  I know a tax adviser who is used to working with overseas lawyers and who can give opinions on the facts of a particular case.  You have messaged me, so I will give you contact details there.