Stamp Duty for 25% Share of property

rebeccavw

I seperated from my partner with whom I jointly owned a property. To enable me and my children to stay in the home my mum wants to pay out my ex partner and take 25% share of my property. I will need to pay rent on this share.

Would she have to pay stamp duty on for the 25% share ? It would be a shared ownership arrangement. Is this possible to do privately not through housing association arrangements? 

GDB2222

Does your mother own her own home?  To get a sensible answer, you need to provide more information, such as the value of your property, percentage shared ownership with the HA, etc.

Keep_pedalling

Probably but you Ned to provide more info. 

How much are we talking about? Does your mother already own a property? Will you also need a mortgage on your home?

SDLT_Geek

rebeccavw said:

I seperated from my partner with whom I jointly owned a property. To enable me and my children to stay in the home my mum wants to pay out my ex partner and take 25% share of my property. I will need to pay rent on this share.

Would she have to pay stamp duty on for the 25% share ? It would be a shared ownership arrangement. Is this possible to do privately not through housing association arrangements? 

Joint ownership between individuals is a different structure from shared ownership with a social landlord.

For various reasons with you mother buying a 25% share, you would not want to try to replicate a shared ownership structure.

You are likely better off owning in shares with a declaration of trust setting out the agreed terms.

rebeccavw

Keep_pedalling said:

Probably but you Ned to provide more info. 

How much are we talking about? Does your mother already own a property? Will you also need a mortgage on your home?

GDB2222 said:

Does your mother own her own home?  To get a sensible answer, you need to provide more information, such as the value of your property, percentage shared ownership with the HA, etc.

My mother owns her own home. My property is worth £400k and it's not a shared ownership property. She wants a declaration of trust showing 25% beneficial interest.

rebeccavw

I don't have a mortgage 

rebeccavw

SDLT_Geek said:

rebeccavw said:

I seperated from my partner with whom I jointly owned a property. To enable me and my children to stay in the home my mum wants to pay out my ex partner and take 25% share of my property. I will need to pay rent on this share.

Would she have to pay stamp duty on for the 25% share ? It would be a shared ownership arrangement. Is this possible to do privately not through housing association arrangements? 

Joint ownership between individuals is a different structure from shared ownership with a social landlord.

For various reasons with you mother buying a 25% share, you would not want to try to replicate a shared ownership structure.

You are likely better off owning in shares with a declaration of trust setting out the agreed terms.

Thanks and would she have to pay higher rate stamp duty with declaration of trust 

Keep_pedalling

If she loaned you the money and you paid her interest instead of rent then she would avoid any form of purchase tax. She could protect her loan be placing a charge on your property.

SDLT_Geek

rebeccavw said:

SDLT_Geek said:

rebeccavw said:

I seperated from my partner with whom I jointly owned a property. To enable me and my children to stay in the home my mum wants to pay out my ex partner and take 25% share of my property. I will need to pay rent on this share.

Would she have to pay stamp duty on for the 25% share ? It would be a shared ownership arrangement. Is this possible to do privately not through housing association arrangements? 

Joint ownership between individuals is a different structure from shared ownership with a social landlord.

For various reasons with you mother buying a 25% share, you would not want to try to replicate a shared ownership structure.

You are likely better off owning in shares with a declaration of trust setting out the agreed terms.

Thanks and would she have to pay higher rate stamp duty with declaration of trust 

Yes, say the property is in England and she end up with a 25% share for £100,000, then she would pay stamp duty land tax of £5,000 (or £7,000 if she does not count as UK resident).

As @Keep_pedalling says, it would be different if the money is advanced as a loan.

GDB2222

rebeccavw said:

Keep_pedalling said:

Probably but you Ned to provide more info. 

How much are we talking about? Does your mother already own a property? Will you also need a mortgage on your home?

GDB2222 said:

Does your mother own her own home?  To get a sensible answer, you need to provide more information, such as the value of your property, percentage shared ownership with the HA, etc.

My mother owns her own home. My property is worth £400k and it's not a shared ownership property. She wants a declaration of trust showing 25% beneficial interest.

She would pay £5,000 SDLT.  She would also be liable to pay income tax on the rent you pay her. 

If she owns 25% of the property, it would automatically be what you term shared ownership. 

To make the agreement between you and your mum legally watertight you each need to have a solicitor and it should not be the same person acting for both of you. 

rebeccavw

SDLT_Geek said:

rebeccavw said:

SDLT_Geek said:

rebeccavw said:

I seperated from my partner with whom I jointly owned a property. To enable me and my children to stay in the home my mum wants to pay out my ex partner and take 25% share of my property. I will need to pay rent on this share.

Would she have to pay stamp duty on for the 25% share ? It would be a shared ownership arrangement. Is this possible to do privately not through housing association arrangements? 

Joint ownership between individuals is a different structure from shared ownership with a social landlord.

For various reasons with you mother buying a 25% share, you would not want to try to replicate a shared ownership structure.

You are likely better off owning in shares with a declaration of trust setting out the agreed terms.

Thanks and would she have to pay higher rate stamp duty with declaration of trust 

Yes, say the property is in England and she end up with a 25% share for £100,000, then she would pay stamp duty land tax of £5,000 (or £7,000 if she does not count as UK resident).

As @Keep_pedalling says, it would be different if the money is advanced as a loan.

Thanks as my mum owns her own house would she not be liable for higher rate of stamp duty ? Is the stamp duty percentage of £100,000 her share or £400,000 the full house value ?