PLEASE READ BEFORE POSTING

Hello Forumites! In order to help keep the Forum a useful, safe and friendly place for our users, discussions around non-MoneySaving matters are not permitted per the Forum rules. While we understand that mentioning house prices may sometimes be relevant to a user's specific MoneySaving situation, we ask that you please avoid veering into broad, general debates about the market, the economy and politics, as these can unfortunately lead to abusive or hateful behaviour. Threads that are found to have derailed into wider discussions may be removed. Users who repeatedly disregard this may have their Forum account banned. Please also avoid posting personally identifiable information, including links to your own online property listing which may reveal your address. Thank you for your understanding.

Stamp duty surcharge

Options
Fixil9
Fixil9 Posts: 11 Forumite
in House buying, renting & selling
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??????
«13

Comments

  • Fixil9
    Fixil9 Posts: 11 Forumite
    Options
    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
    AnotherJoe Posts: 19,622 Forumite
    First Anniversary Name Dropper First Post Photogenic
    Options
    i think you'll find the exemption is if you have less than 21 years on the lease.
  • Fixil9
    Fixil9 Posts: 11 Forumite
    Options
    Read condition C
  • AnotherJoe
    AnotherJoe Posts: 19,622 Forumite
    First Anniversary Name Dropper First Post Photogenic
    Options
    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
    Fixil9 Posts: 11 Forumite
    Options
    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
    davidmcn Posts: 23,596 Forumite
    Name Dropper First Anniversary First Post
    edited 12 March 2018 at 6:12PM
    Options
    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
    Tom99 Posts: 5,371 Forumite
    First Post First Anniversary
    Options
    [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
    Fixil9 Posts: 11 Forumite
    Options
    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
    Tom99 Posts: 5,371 Forumite
    First Post First Anniversary
    Options
    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
    Fixil9 Posts: 11 Forumite
    Options
    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.
This discussion has been closed.
★ ★ ★ Meet your Ambassadors

Categories

  • All Categories
  • 343.3K Banking & Borrowing
  • 250.1K Reduce Debt & Boost Income
  • 449.7K Spending & Discounts
  • 235.3K Work, Benefits & Business
  • 608.1K Mortgages, Homes & Bills
  • 173.1K Life & Family
  • 248K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 15.9K Discuss & Feedback
  • 15.1K Coronavirus Support Boards