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SDLT on transfer of equity of marital home

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tonymac52
tonymac52 Posts: 1 Newbie
in House buying, renting & selling
Help please. Recently got married and wanting to transfer the home that we are living in and have been for the last 2 years into joint names with my wife. We have been together longer. The property is currently in my sole name. Mortgage is around £158K. We own other properties jointly which are rented out. Because of this, I understand that my wife will have to pay 3% stamp duty on half of the mortgage value to be able to do this. Is this correct? How is this fair? Is there any way round it? Advice appreciated, thank you.

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  • G_M
    G_M Posts: 51,977 Forumite
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    She is becoming a 2nd home owner.


    the tax is designed to hit..... 2nd home owners.
  • kingstreet
    kingstreet Posts: 38,788 Forumite
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    I'm not sure about this.

    Married and purchasing a share of the home she has resided in for several years? There is no increase in the number of properties owned by the couple as a whole.

    I'd do further research on the HMRC site before accepting this should be SDLT surcharged.
    I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.
  • pollyanna24
    pollyanna24 Posts: 4,370 Forumite
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    I had to pay stamp duty when I bought my brother out of the property that I had owned and lived in for years.

    Seemed particularly unfair when I paid stamp duty on it when I first bought the house with my ex (and then my brother bought him out) 12 years ago.
    Pink Sproglettes born 2008 and 2010
    Mortgages (End 2017) - £180,235.03
    (End 2021) - £131,215.25 DID IT!!!
    (End 2022) - Target £116,213.81
  • SDLT_Geek
    SDLT_Geek Posts: 2,508 Forumite
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    Check out the changes made by the Autumn Budget of 22 November 2017. They provide a new "get out" of the higher rates for transfers just between spouses. It is an exemption from higher rates (the 3% surcharge) only, not from SDLT generally.


    Do not let anyone tell you that spouses are treated as a single unit!!
  • gingercordial
    gingercordial Posts: 1,681 Forumite
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    Why do you need to do the transfer? Your partner could just register "matrimonial home rights" on the property with the land registry and that should protect her in the event of a divorce after a short marriage.

    https://www.google.co.uk/search?q=register+matrimonial+home+rights&rlz=1C1CHBF_en-GBGB748GB748&oq=register+matri&aqs=chrome.0.0j69i57j0l4.2831j0j7&sourceid=chrome&ie=UTF-8

    After a long marriage the fact that it was held in just your name wouldn't matter as all assets would be divided up by the court.

    If you have no children and die intestate it would go to her as your spouse anyway. But you should make a will or update your existing one (because they become invalid on marriage unless you specified otherwise beforehand) as good practice and can leave it to her there too.

    I don't see the benefit of doing this if it is going to cost you money in SDLT.
  • SoFedUpOfBeingRippedOff
    SoFedUpOfBeingRippedOff Posts: 14 Forumite
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    Thanks for the advice on here which has been helpful. It categorically states on HRMC website (today at 9/8/18) Guidance -
    Higher rates of Stamp Duty Land Tax - (guidance/stamp-duty-land-tax-buying-an-additional-residential-property) page...

    Transactions
    If you’re transferring ownership (or part ownership) of a residential property to your spouse, the higher rates do not apply as long as no one else is involved in the transfer.

    I phoned HRMC SDLT advice line and they said they had not been made aware of this but said that if it says so on the website that it must be the case. Scary if this has been in place since Nov 2017 and advisors are still not aware!!
  • SDLT_Geek
    SDLT_Geek Posts: 2,508 Forumite
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    It is good that the HMRC guidance is catching up, even if the Helpline are not helpful.
  • SoFedUpOfBeingRippedOff
    SoFedUpOfBeingRippedOff Posts: 14 Forumite
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    Just an update. See also SDLTM09820 in the stamp duty land tax manual online. Our conveyancer insisted that we had to pay the higher rate and I insisted that we didn't. She gave all sorts of reasons why the higher rate applied to us which to be perfectly honest did not make sense.

    I phoned the SDLT line again and this time they confirmed that we we did not appear to be liable for the higher rate because we were married. I did not pay because it is a self assessment tax and I assessed myself as not being liable based on the information quoted on HMRC website and SDLT manual.

    Just to be on the safe side I wrote to HMRC for a definitive answer on my case. Today received the response "I agree with your analysis that the higher rates for purchases of additional residential properties will not apply to your transfer of equity as your transfer only involves the parties to a marriage. This advice applies, irrespective of whether your and or your husband also own other residential property." I hope this update will save others the considerable amount of time I had to spend researching this and also from paying tax that is not due. :j
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