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Wow, ok... It's not an inability to understand basic Stamp duty this is a somewhat more complex situation that is not straightforward, I don't see anyone on here including yourself being able to help with an answer!
When did I say that she was married? Did I ever say that? She was not married previously she entered into a mortgage agreement with an ex partner 10 years ago... There was nothing to settle on separation, her right to the property is legally binding regardless of mortgage contribution - we have already been told this by our solicitor.
The point of this thread is to try and ascertain how stamp duty is calculated when someone is added to deeds and a mortgage and that person already owns another property, I understand that anything over a purchase price of £125k is subject to standard SDLT but if she is only liable for half of the mortgage amount (approx £95k) then is it payable on her part?0 -
My understanding would be a new transaction is about to take place, you will be "selling" your house, value £260k to both of you.
The stamp duty will "normally" be £3,000 but will suffer from second property tax, so you will pay £10,800 for this transaction, £7,800 refunded if her second house is sold within 3 years.
https://www.tax.service.gov.uk/calculate-stamp-duty-land-tax/#/intro
SDLT is not linked to how much you are borrowing, it is the "consideration", ie property value.
Why not just ring the HMRC helpline, they will tell you the definitive rule?Signature on holiday for two weeks0 -
Thank you for trying to answer the question I was actually asking, some others seem to find that difficult. :money:0
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Bigbrowney wrote: »The point of this thread is to try and ascertain how stamp duty is calculated when someone is added to deeds and a mortgage and that person already owns another property, I understand that anything over a purchase price of £125k is subject to standard SDLT but if she is only liable for half of the mortgage amount (approx £95k) then is it payable on her part?on the consideration of the mortgage. The 3% surcharge is an issue.
she owns an existing property so she meets condition C - existing owner
https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm09780
she is not selling that property so she meets condition D - non replacement of a main residence
https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm09800
the higher rate threshold starts at 40k so she meets condition A (see below re chargeable consideration)
https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm09770
the property itself is, we assume, not a leasehold with a short lease, so she meets condition B
https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm09775
On the basis of the above, Conditions A-D apply and any transaction is a higher rate one
https://www.gov.uk/guidance/stamp-duty-land-tax-buying-an-additional-residential-property
SDLT is based on chargeable consideration. In the context of a transfer of equity for an existing owner to a non owner there are 2 possibilities:
a) where no cash physically changes hands the consideration is either nothing (because it is a gift)
or,
b) where there is a mortgage, as she is not an existing co owner, the consideration is 50% of the value of the o/s mortgage
https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm04040a
The rules re mortgages apply whether married or not, although this page gives the example of married people transferring between themselves
https://www.gov.uk/guidance/sdlt-transferring-ownership-of-land-or-property
PS if you and she want to avoid the higher rate SDLT then do the transfer after you have got married, as transfers between spouses are now exempt from the higher rate - but still subject to the standard rate
https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm098200
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