Second property and stamp duty question

bikeman17 wrote: »

I'm towards the end in purchasing my second property on a joint name with my wife. However I've agreed with my brother that I transfer the first property back to him as we agreed before were it was originally a joint name with me no interest in this property.

If the transfer of property 1 goes back in his name, would I be liable to pay extra stamp duty fee or fall the category of '0% on the first £300,000'?

Is property 1 the only other property you currently own?

The higher rate of SDLT applies to the purchase of additional residential properties. You currently own one property and by the time you complete the purchase of the new property you will still only own one property ergo there will be no additional properties and the higher rate will not apply.

It's a lot like the flowchart in your previous thread about the higher rate of SDLT

bikeman17 wrote: »

What if by the time property 2 completes and property 1 paperwork is still in process, will I still be required to pay the additional stamp duty?

yes you will

how much simpler can this be:

- you own 1 property. It is not your main home (it is let)
- you are buying an additional property.
- you will therefore own 2 properties and the higher rate SDLT will apply to the purchase of the one you intend to live in as your home

OR

- you own 1 property. It is not your main home (it is let)
- you transfer that ownership to your brother
- QED you no longer own a property
- you buy a home to live in. It is the only property you own at the point the purchase complete so you will pay the standard rate SDLT.
- You are not eligible for the FTB SDLT rate since you have previously owned a property and therefore this very obviously is not your first

bikeman17 wrote: »

I've agreed with my brother that I transfer the first property back to him as we agreed before were it was originally a joint name

have you calculated how much Capital gains tax you will need to pay when you dispose of your share in the let property?
You cannot give it to your brother and think that will be tax free.

bikeman17 wrote: »

I think there is some confusion with the FTB Stamp duty and higher rate tamp duty.

Based on my scenario and according to the flow chart, correct me if I'm wrong, I will be paying the stamp duty and not the 3% higher rate. Because the home I will be buying will be my main home.

When I do the switch to my brother there is not further tax as the property is fully going to him.

:wall::wall::wall:

Someone is confused but it's not us.

You currently own one property, if at the end of the transaction you own two properties i.e. you will have purchased an additional property then the higher rate of SDLT for the purchase of additional residential properties will apply.

When you dispose of a property that was not your main residence, and the property you currently own is not your main residence because it is currently let, then you trigger a Capital Gains Tax liability. Even if you give away your share of the property to your brother for nothing your Capital Gains Tax liability will be based on the market value of the share you are giving away.