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  • FIRST POST
    • mfz1
    • By mfz1 16th Apr 18, 12:00 PM
    • 5Posts
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    mfz1
    Buying a second home
    • #1
    • 16th Apr 18, 12:00 PM
    Buying a second home 16th Apr 18 at 12:00 PM
    Curious to know as couple I know are in this situation. The guy had bought his house prior to getting married the woman had lived with her parents up until then. They are now living in the same house with the house still being in the husband's name.

    They now want to buy a bigger house and have the means to, the husband doesn't want to sell his existing house but wants to buy the house with the wife.

    I have told them that they'll have to pay stamp duty and they can't understand why since the wife has never been a homeowner.

    Am i correct in making this assumption?

    Now I have been asked the question of (if i'm right) how they can avoid paying for stamp duty.

    Other than maybe the wife can buy the entire house in her name? or Buying through a limited company is the only thing i can think of. Not entirely sure on the details of either two
Page 1
    • p00hsticks
    • By p00hsticks 16th Apr 18, 12:06 PM
    • 6,331 Posts
    • 6,865 Thanks
    p00hsticks
    • #2
    • 16th Apr 18, 12:06 PM
    • #2
    • 16th Apr 18, 12:06 PM
    Am i correct in making this assumption?
    Originally posted by mfz1
    Yes you are

    Now I have been asked the question of (if i'm right) how they can avoid paying for stamp duty.
    Originally posted by mfz1
    The only way is to sell the current house.

    As they're married they're considered a single entity for this legislation, so buying in just the wifes name wouldn't help.

    Buying via a limited company wouldn't be a smart move either - for one thing a company can't have a PPR so there would be Capital Gains Tax due when the company came to sell it.
    Last edited by p00hsticks; 16-04-2018 at 12:09 PM.
    • davidmcn
    • By davidmcn 16th Apr 18, 12:06 PM
    • 8,217 Posts
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    davidmcn
    • #3
    • 16th Apr 18, 12:06 PM
    • #3
    • 16th Apr 18, 12:06 PM
    Buying in her name doesn't work (unless they get divorced first!) because married couples are treated as a single unit.

    Buying through a limited company doesn't work because HMRC aren't daft and have covered that off.

    They'll need to pay the additional rate or sell the first house.
    • mfz1
    • By mfz1 16th Apr 18, 12:23 PM
    • 5 Posts
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    mfz1
    • #4
    • 16th Apr 18, 12:23 PM
    • #4
    • 16th Apr 18, 12:23 PM
    Good stuff, I'll tell them to get divorced, in fairness I did ask the guy are u sure you want to get married? lol!

    Single entity! how has there not been a court case for that yet ?

    Its not financially beneficial for a working couple to get married anymore is there.
    • p00hsticks
    • By p00hsticks 16th Apr 18, 12:28 PM
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    p00hsticks
    • #5
    • 16th Apr 18, 12:28 PM
    • #5
    • 16th Apr 18, 12:28 PM
    Its not financially beneficial for a working couple to get married anymore is there.
    Originally posted by mfz1
    On the cotrary, there are many financial advantages to being married, but allowing a married couple to own two homes when they are only living in one would defeat the object of the additional stamp duty legislation, which is to encourage people to free up property when they move rather than hang onto them and become 'accidental' landlords
    • Slithery
    • By Slithery 16th Apr 18, 12:43 PM
    • 792 Posts
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    Slithery
    • #6
    • 16th Apr 18, 12:43 PM
    • #6
    • 16th Apr 18, 12:43 PM
    Just to make this clear, they are not only due to pay the standard stamp duty but also the additional stamp duty for multiple properties.
    • mfz1
    • By mfz1 16th Apr 18, 2:44 PM
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    mfz1
    • #7
    • 16th Apr 18, 2:44 PM
    • #7
    • 16th Apr 18, 2:44 PM
    okay I understand that you can transfer assets without having to worry about tax between each other and sharing capital gains tax. Marriage tax allowance however is only good if one person earns 11800 or less.

    I thought that the second home stamp duty would be part of it and there would be no additional?

    i.e. if you already own a house and say purchased another house for 500,000 then you'd have to pay 30,000 in stamp duty or is there something else that they need to consider?
    • p00hsticks
    • By p00hsticks 16th Apr 18, 3:23 PM
    • 6,331 Posts
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    p00hsticks
    • #8
    • 16th Apr 18, 3:23 PM
    • #8
    • 16th Apr 18, 3:23 PM
    i.e. if you already own a house and say purchased another house for 500,000 then you'd have to pay 30,000 in stamp duty or is there something else that they need to consider?
    Originally posted by mfz1
    That's it - whereas if they sold the existing property when purchasing the next, the SDLT would be 15,000 (assuming they are in England - I believe the rules may be different in Scotland and Wales)
    • davidmcn
    • By davidmcn 16th Apr 18, 3:53 PM
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    davidmcn
    • #9
    • 16th Apr 18, 3:53 PM
    • #9
    • 16th Apr 18, 3:53 PM
    Though given that most couples need (or at least want) their home to be in joint names, the additional rate of SDLT would apply whether or not they are married.
    Last edited by davidmcn; 16-04-2018 at 9:31 PM.
    • mfz1
    • By mfz1 16th Apr 18, 8:27 PM
    • 5 Posts
    • 0 Thanks
    mfz1
    Hang on wouldn't they be exempt from the first 300,000 since the wife is technically a first time buyer? Never had a property to her name.
    • noh
    • By noh 16th Apr 18, 8:34 PM
    • 5,256 Posts
    • 3,558 Thanks
    noh
    Hang on wouldn't they be exempt from the first 300,000 since the wife is technically a first time buyer? Never had a property to her name.
    Originally posted by mfz1
    No read post #2 above.
    As they're married they're considered a single entity for this legislation, ........
    • Pixie5740
    • By Pixie5740 16th Apr 18, 8:57 PM
    • 12,700 Posts
    • 18,140 Thanks
    Pixie5740
    Hang on wouldn't they be exempt from the first 300,000 since the wife is technically a first time buyer? Never had a property to her name.
    Originally posted by mfz1
    Technically?

    Legally the married couple own one property and at the end of the transaction they would own two. Two is greater than one so the higher rate applies. It also means that as the couple pass the test, if you will, for the higher rate of SDLT the exemption for FTB cannot apply.

    If you want to read more about it here is the link to the SDLT manual.

    https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual
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