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Not_a_clue
Posts: 29 Forumite
Just trying to work out whether or not we can disentangle ownership of two properties, or whether or not the additional stamp duty costs tie us forever.
Both properties jointly owned in England (not tenancy in common). Not married or in a civil partnership. First property worth £200k, second worth £400k, both have been main homes in the last three years.
Scenario 1. Transfer each property to one owner, with the owner of the higher value property paying half the difference in value to the other.
Scenario 2. Transfer the less valuable property to one owner, and the higher value one as tenants in common at 75%:25%.
Any views on the respective stamp duty positions?
Thanks
Both properties jointly owned in England (not tenancy in common). Not married or in a civil partnership. First property worth £200k, second worth £400k, both have been main homes in the last three years.
Scenario 1. Transfer each property to one owner, with the owner of the higher value property paying half the difference in value to the other.
Scenario 2. Transfer the less valuable property to one owner, and the higher value one as tenants in common at 75%:25%.
Any views on the respective stamp duty positions?
Thanks
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Comments
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I don't quite understand what you're asking. You haven't mentioned buying another property to pay SDLT on, who is buying it and how that relates to your shuffling your joint assets around.
Scenario 1 I can't quite decipher what you're asking, but if you pay money for property to another person that you are not married to, then that triggers the requirement to pay SDLT itself.
Scenario 2 results in you both still being owners of property. I don't know if you're buying another one but if you did, it would trigger the additional SDLT. Tenants in common or joint tenants makes no difference to anything. It's about names on deeds.
It's much better to pose these questions in the first person than the third as things get lost in the translation, so to speak.Everything that is supposed to be in heaven is already here on earth.
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whether you each own an existing property as sole owner or as joint owner is irrelevant if you are not going to:
a) buy the next property as joint owners; and :
b) retain at least one old property
if you are going to buy the next property as sole owner then you can't retain ownership of an old property
Have you read the rules?
https://www.gov.uk/guidance/stamp-duty-land-tax-buying-an-additional-residential-property0 -
[FONT=Verdana, sans-serif]I think since they are connected transactions stamp duty will be paid on each property by the person acquiring a greater interest. This will be based on the total consideration which will be the value of the other 50% share in the property being given up plus any cash consideration.[/FONT]
[FONT=Verdana, sans-serif]Is there a mortgage on either property and are you connected persons?[/FONT]0 -
Doozergirl & 00ec25 we have no plans to buy any further properties so continued shared ownership would not be a problem in respect of additional stamp duty on further properties. Just realised that I shouldn't have used the word "additional" in the first sentence of my original post and this is why it is confusing. Blame the time I was posting.
Tom99 surprisingly (to me) we are connected persons. The properties are both owned outright.
I'm hoping we don't have to sell both to avoid a huge bill. There is already some capital gains liability, but that might be a separate post.0 -
You only pay Stamp Duty when you BUY a house!
You have nothing to pay. Why are you worrying?!Everything that is supposed to be in heaven is already here on earth.
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incorrectDoozergirl wrote: »You only pay Stamp Duty when you BUY a house!
You have nothing to pay. Why are you worrying?!
SDLT applies to the transfer of "consideration", since OP proposes to give a house (or share thereof) in exchange for a house (or share thereof), there is consideration "exchanged" and so SDLT may apply
OP "connected person" has a specific meaning in tax - why do you say you are connected?
Read the following ..... particularly example 4
https://www.gov.uk/guidance/sdlt-transferring-ownership-of-land-or-property#if-you-transfer-or-divide-up-jointly-owned-property-or-land-unmarried-couples-and-other-joint-owners
https://www.gov.uk/guidance/sdlt-transferring-ownership-of-land-or-property#if-the-larger-share-is-given-outright-as-a-gift0 -
incorrect
SDLT applies to the transfer of "consideration", since OP proposes to give a house (or share thereof) in exchange for a house (or share thereof), there is consideration "exchanged" and so SDLT may apply
OP "connected person" has a specific meaning in tax - why do you say you are connected?
Read the following ..... particularly example 4
https://www.gov.uk/guidance/sdlt-transferring-ownership-of-land-or-property#if-you-transfer-or-divide-up-jointly-owned-property-or-land-unmarried-couples-and-other-joint-owners
https://www.gov.uk/guidance/sdlt-transferring-ownership-of-land-or-property#if-the-larger-share-is-given-outright-as-a-gift
I did say in my first post at the time that I didn't really understand the post. I thought they were trying to move ownership to avoid the "additional" SDLT on another purchase.
I did say earlier that paying someone for a share of a property triggered SDLT, but I was assuming it was motivated by the 3% surcharge.
So yes, my subsequent post was rubbish. I was confused by the word "additional" the first time round.
Apologies, OP. You did explain yourself the second time and then I misunderstood.Everything that is supposed to be in heaven is already here on earth.
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Don't worry Doozergirl, I think heat exhaustion confuddled my brain.
We are connected persons under S1122 5b https://www.legislation.gov.uk/ukpga/2010/4/section/1122
Do you think they could have made stamp duty any more confusing? It would be easier, if unpleasant, for one of us to die, thus avoiding stamp duty and possibly CGT (depending who went first), though of course IHT would still remain.0 -
LOL it would be a lot less confusing for us if you just said how you are connected to the other personNot_a_clue wrote: »Don't worry Doozergirl, I think heat exhaustion confuddled my brain.
We are connected persons under S1122 5b https://www.legislation.gov.uk/ukpga/2010/4/section/1122
Do you think they could have made stamp duty any more confusing? It would be easier, if unpleasant, for one of us to die, thus avoiding stamp duty and possibly CGT (depending who went first), though of course IHT would still remain.0 -
Not_a_clue wrote: »Don't worry Doozergirl, I think heat exhaustion confuddled my brain.
The heat is the reason I was awake at 4am as well!
Everything that is supposed to be in heaven is already here on earth.
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