Mortgage change and Tax

jstallanjstallan Forumite
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Hi,

Our current mortgage deal is about to expire (Alliance & Leicester) and we wish to move to Nationwide. We have already secured a deal (5.19% fixed for 2 years) by submitting a cheque covering the setup fees.

Our problem is that our mortgage is a guarantor type mortgage (I'm the guarantor for my wife). When we bought our house (1999 - mortgage via Alliance and Leicester) we were advised to go down this route (long story) and at the time we were not married. We bought the house in 1999 and a year later we got married (did not change the mortgage). In 2002, we the mortgage deal expired and we stayed with the A&L and got another deal (still under guarantor type mortgage). We now wish to move away from the guarantor type mortgage and have both our names on the mortgage. Are there are stamp duties or tax to pay if we do this...

Mortgage in 1999 was £71,000
House price in 1999 was £109.000
Mortgage now is £62,000
House price now approx £260,000


Thanks,
John
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Replies

  • paylesspayless Forumite
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    A solicitor should have all the correct tables for calculation - but you could ask the stamp office (IR)

    http://www.inlandrevenue.gov.uk/so/contact_details.htm
    Any posts on here are for information and discussion purposes only and shouldn't be seen as (financial) advice.
  • jstallanjstallan Forumite
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    thanks for the link... every solictor we have called either doesn't know and promises to call back - yet doesn't, or is very rude.....

    Called the stamp office and was advised that duty is payable on half debt (mortgage) over £60,000.... So it seems that (looking at our £62k mortgage) we have no duty to pay...

    Land Registry states that the property is registered in my wife's name - not sure if that makes a difference?
  • paylesspayless Forumite
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    Thats what I thought, (if no other money passing hands) but did not want to put my head on the block, and thought best from the horses mouth.
    Any posts on here are for information and discussion purposes only and shouldn't be seen as (financial) advice.
  • lisyloolisyloo Forumite
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    Land Registry states that the property is registered in my wife's name - not sure if that makes a difference?

    Almost certainly.

    Lender want the mortgage in the same names as the property these days (for legal reasons to do with repossesion).

    The ownership of the property (at the land registry) is not the same thing as the names on the mortgage).

    You will need to get this sorted out and unfortunately it will cost in solicitors fees.
    Do you have any friends, family, colleagues who could recommend a solicitor to you?
  • jstallanjstallan Forumite
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    No recommendations unfortuantly. The solicitor we used when we bought the property was terrible and therefore not returning to him..

    As the Nationwide (new lender) are including legal fees (basic remortgage only) in the deal, I wondered if we could use their solicitiors (and pay the extra), that way it keeps it all together and would hopefully speed things up (or not introduce additional delays)... Trying to get appointment with the Nationwide as I type....
  • paylesspayless Forumite
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    The NatWide deal has changed 2/3 times since the 5.19% rate ( rates and fees gone up) so good if booked

    Free solicitors - but will charge for extras and my guess is usually on high side
    - The NW staff have a lsit of example extras on legal side , but when i tried for last client that needed extras, they were a bit confused and sent me all around the place. Although if at offer stage may be too late to swap to a different sold anyway
    Any posts on here are for information and discussion purposes only and shouldn't be seen as (financial) advice.
  • lisyloolisyloo Forumite
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    I wondered if we could use their solicitiors (and pay the extra),

    Maybe, maybe not.

    When I remortgage via Alliance & lecister, they outsource their conveyancing to a different company.
    Whenever I spoke to them on the phone, I felt like I was speaking with a very junior admin person.
    I am guessing but I got the impression that there are a lot of low paid admin people doing the work (with posibly a solicitor or two overseeing things to make it all above board).
    I am not sure that they are the best people to cope with anything out of the ordinary as they are obviously trying to minimise costs.
  • Would suggest you contact Nationwide ask for Sols details right away. I know Nationwide where looking at system where you can track progress of Conveyancing via secure inernet link Abbey & several other lenders are using this. Have found that all major lenders outsource work but mainly to large firms which give excellent service & specialise in Coneyancing will have come across your scenario more than you think.

    So would check if tracking link is available if not get email contact drop them a line also print the e-mail and fax it to them then try giving them a ring.They will have time to asses your questions first.

    But the change over to joint names will be sorted as matter of course there should be to much extra charges as all legal documentation being changed over to new lender anyway.

    Stamp Duty only payable on purchase and this is remortgage There should be no Tax Liability Although with figures given you are Nearing IHT limit on equity alone.

    Hope this has been of some help to you.

    MJ
    What goes around - comes around
    give lots and you will always recieve lots
  • Just a quick PS you say you booked funds while onto Nationwide check time limit of holding funds, as there will be a time limit I assure you.

    Just to make sure you don,t miss any deadlines for completetion.

    MJ
    What goes around - comes around
    give lots and you will always recieve lots
  • lisyloolisyloo Forumite
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    Stamp Duty only payable on purchase and this is remortgage

    I am not sure you are right on this.
    If there is a transfer of equity going on during a remortgage then it is regarded by the Inland Revenue as a sale and a purchase.
    In this case it is between spouses so there may be no stamp duty liability but I can't say for sure.
    But the change over to joint names will be sorted as matter of course there should be to much extra charges as all legal documentation being changed over to new lender anyway.

    Are you sure about this.
    I can't find a link right now (will search if I have time) but I have seen plenty of cases on these boards and others where people are quoted about £800 by solicitors.
    I will see if I can find a link.
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