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    • Fixil9
    • By Fixil9 12th Mar 18, 4:22 PM
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    Fixil9
    Stamp duty surcharge
    • #1
    • 12th Mar 18, 4:22 PM
    Stamp duty surcharge 12th Mar 18 at 4:22 PM
    Hi, I need help!!!129327;. Iím 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??????
Page 1
    • Fixil9
    • By Fixil9 12th Mar 18, 4:25 PM
    • 11 Posts
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    Fixil9
    • #2
    • 12th Mar 18, 4:25 PM
    • #2
    • 12th Mar 18, 4:25 PM
    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
    • By AnotherJoe 12th Mar 18, 4:28 PM
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    AnotherJoe
    • #3
    • 12th Mar 18, 4:28 PM
    • #3
    • 12th Mar 18, 4:28 PM
    i think you'll find the exemption is if you have less than 21 years on the lease.
    • Fixil9
    • By Fixil9 12th Mar 18, 4:32 PM
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    Fixil9
    • #4
    • 12th Mar 18, 4:32 PM
    • #4
    • 12th Mar 18, 4:32 PM
    Read condition C
    • AnotherJoe
    • By AnotherJoe 12th Mar 18, 4:51 PM
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    AnotherJoe
    • #5
    • 12th Mar 18, 4:51 PM
    • #5
    • 12th Mar 18, 4:51 PM
    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
    • By Fixil9 12th Mar 18, 4:58 PM
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    Fixil9
    • #6
    • 12th Mar 18, 4:58 PM
    • #6
    • 12th Mar 18, 4:58 PM
    It is very confusing, even the tax advisor from HMRC got confused & couldnít 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 doesnít meet condition C & possibly B.
    Just hoping a legal legend can confirm that my thinking is right. !!!129310;
    • davidmcn
    • By davidmcn 12th Mar 18, 5:04 PM
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    davidmcn
    • #7
    • 12th Mar 18, 5:04 PM
    • #7
    • 12th Mar 18, 5:04 PM
    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.
    Last edited by davidmcn; 12-03-2018 at 5:12 PM.
    • Tom99
    • By Tom99 12th Mar 18, 5:05 PM
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    Tom99
    • #8
    • 12th Mar 18, 5:05 PM
    • #8
    • 12th Mar 18, 5:05 PM
    What do you mean by the property you and you brother own 'has a lease of more than 21 years'
    If you mean that the lease you and your brother own is more than 21 years then you will pay the extra 3%
    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%
    • Fixil9
    • By Fixil9 12th Mar 18, 5:19 PM
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    Fixil9
    • #9
    • 12th Mar 18, 5:19 PM
    • #9
    • 12th Mar 18, 5:19 PM
    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
    • By Tom99 12th Mar 18, 5:24 PM
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    Tom99
    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.
    Originally posted by Fixil9
    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
    • By Fixil9 12th Mar 18, 5:36 PM
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    Fixil9
    Sorry should of added that the flat below has to pay me they same amount in rent for the lease on their property, donít suppose that makes a difference though.
    • Tom99
    • By Tom99 12th Mar 18, 5:41 PM
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    Tom99
    Sorry should of added that the flat below has to pay me they same amount in rent for the lease on their property, donít suppose that makes a difference though.
    Originally posted by Fixil9
    Confusing. Who occupies this flat that you and your brother own?
    • davidmcn
    • By davidmcn 12th Mar 18, 5:44 PM
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    davidmcn
    Sorry should of added that the flat below has to pay me they same amount in rent for the lease on their property, don!!!8217;t suppose that makes a difference though.
    Originally posted by Fixil9
    Ok, it sounds like you and the other flat jointly own the freehold of your block. But if you own the leasehold interest then that counts as a dwelling for the purposes of the SDLT surcharge (assuming your share is worth more than £40k).

    In short, your solicitor's right.
    • SDLT Geek
    • By SDLT Geek 12th Mar 18, 5:49 PM
    • 240 Posts
    • 147 Thanks
    SDLT Geek
    The wording of Conditions B and C confuses a lot of people. The condition for the surcharge: "the dwelling is not subject to a lease which has more than 21 years" does not give an escape route from the surcharge on the basis that a property happens to be leasehold.


    It is intended to give an escape route for a case where the interest bought / held does not carry the right to occupy because it is "subject to" another lease. It is looking to excuse those whose interest is effectively just a reversion with a right to receive a ground rent (rather than an interest that one could buy and then live in the property / receive the full rent).
    • Fixil9
    • By Fixil9 12th Mar 18, 5:53 PM
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    Fixil9
    My brother still live in the property
    • SDLT Geek
    • By SDLT Geek 12th Mar 18, 6:16 PM
    • 240 Posts
    • 147 Thanks
    SDLT Geek
    OP, I wonder if you have owned another property (or a share in one) which you have lived in and since disposed of? Sometimes people's property owning history can save them when they are buying a property to live in, completing the purchase by 26 November 2018.
    • 00ec25
    • By 00ec25 12th Mar 18, 6:48 PM
    • 6,381 Posts
    • 5,894 Thanks
    00ec25
    Read condition C
    Originally posted by Fixil9
    yes, read condition C, it is written in the negative....
    • Fixil9
    • By Fixil9 12th Mar 18, 6:51 PM
    • 11 Posts
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    Fixil9
    I was hoping to complete a transfer of equity before my new purchase completed but it!!!8217;s not looking like it will happen in time, which means In the eyes of my solicitor means I have to pay an extra £6750 stamp duty them claim it back, was just hoping I could find a way of not having to pay & claim.
    • Tom99
    • By Tom99 12th Mar 18, 6:59 PM
    • 2,070 Posts
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    Tom99
    I was hoping to complete a transfer of equity before my new purchase completed but it!!!8217;s not looking like it will happen in time, which means In the eyes of my solicitor means I have to pay an extra £6750 stamp duty them claim it back, was just hoping I could find a way of not having to pay & claim.
    Originally posted by Fixil9
    You could probably transfer your 50% beneficial interest in the flat to your brother fairly quickly with a deed of trust.
    Did you previously live in the flat? I think that's required if you want a refund.
    • Fixil9
    • By Fixil9 12th Mar 18, 7:02 PM
    • 11 Posts
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    Fixil9
    Yes I lived there until April 2016 then moved into rented accommodation.
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