Stamp duty surcharge

Fixil9 · 12 March 2018 at 4:22PM

Hi, I need help!!!129327;. I’m am buying a property with my fianc!, but I currently part own a property with my brother, this property has a lease of more than 21 years .
Looking at HMRC guidance I am exempt from the higher tax rate because my current property has a lease of more than 21 years to expiration but my solicitor seems to think otherwise & is insisting I still have to pay the higher rate of stamp duty??????

Fixil9 · 12 March 2018 at 4:25PM

The higher rates will apply to the purchase of a major interest in a single dwelling by an individual, if at the end of the day of purchase Conditions A to D are met9:
!!!9679; Condition A - the chargeable consideration is £40,000 or more;
!!!9679; Condition B - the dwelling is not subject to a lease which has more than 21 years
to run on the date of purchase;
!!!9679; Condition C - the purchaser owns a major interest in another dwelling which has a market value of £40,000 or more and is not subject to a lease which has more than 21 years to run at the date of purchase of the new dwelling; and
!!!9679; Condition D - the dwelling being purchased is not replacing the purchaser!!!8217;s only or main residence.
3.2 If any of Conditions A to D are not met the higher rates will not apply to the purchase.

AnotherJoe · 12 March 2018 at 4:28PM

i think you'll find the exemption is if you have less than 21 years on the lease.

Fixil9 · 12 March 2018 at 4:32PM

Read condition C

AnotherJoe · 12 March 2018 at 4:51PM

I think the wording is confusing since its a negative.
Run through the government SDLT calculator to see and it comes out as they want the money !

It makes no sense they wouldn't want the extra tax for long leases, only short ones.
You can understand why there would be an exemption for short leases

Fixil9 · 12 March 2018 at 4:58PM

It is very confusing, even the tax advisor from HMRC got confused & couldn’t give me an answer, as far as I can see all of those conditions need to be met in order for me to be liable, but my situation doesn’t meet condition C & possibly B.
Just hoping a legal legend can confirm that my thinking is right. !!!129310;

davidmcn · 12 March 2018 at 5:04PM

If your interest is subject to a long lease, that means what you own is the freehold. So the exemption doesn't apply to you, as you're (I think!) the leaseholder.

Tom99 · 12 March 2018 at 5:05PM

[FONT=Verdana, sans-serif]What do you mean by the property you and you brother own 'has a lease of more than 21 years'[/FONT]
[FONT=Verdana, sans-serif]If you mean that the lease you and your brother own is more than 21 years then you will pay the extra 3%[/FONT]
[FONT=Verdana, sans-serif]But if you mean that you and your brother let the dwelling to a 3rd party on a lease which has over 21 years to run you will not pay the 3%[/FONT]

Fixil9 · 12 March 2018 at 5:19PM

This is hard to explain, trying to make as much sense as I can.
I pay a nominal rent for the lease to the owner of the flat under mine.

Tom99 · 12 March 2018 at 5:24PM

Fixil9 wrote: »

This is hard to explain, trying to make as much sense as I can.
I pay a nominal rent for the lease to the owner of the flat under mine.

Unless you sublet the flat to someone else with more than 21 year to run on that sublet you will pay the extra 3%.

It sounds like you don't sublet the flat at all so +3% will apply

Fixil9 · 12 March 2018 at 5:36PM

Sorry should of added that the flat below has to pay me they same amount in rent for the lease on their property, don’t suppose that makes a difference though.

Stamp duty surcharge

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