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  • FIRST POST
    • bikeman17
    • By bikeman17 7th May 18, 2:54 PM
    • 189Posts
    • 22Thanks
    bikeman17
    Second property and stamp duty question
    • #1
    • 7th May 18, 2:54 PM
    Second property and stamp duty question 7th May 18 at 2:54 PM
    I'm towards the end in purchasing my second property on a joint name with my wife. However I've agreed with my brother that I transfer the first property back to him as we agreed before were it was originally a joint name with me no interest in this property.

    If the transfer of property 1 goes back in his name, would I be liable to pay extra stamp duty fee or fall the category of '0% on the first £300,000'?
Page 2
    • capital0ne
    • By capital0ne 7th May 18, 6:45 PM
    • 524 Posts
    • 254 Thanks
    capital0ne
    I wouldn't trust any answer given here. Go and see a solicitor or a taxation specialist who is experienced in second property ownership and CGT - it will cost you but could save you a considerable amount in the long run
    • 00ec25
    • By 00ec25 8th May 18, 7:21 AM
    • 6,646 Posts
    • 6,229 Thanks
    00ec25
    I wouldn't trust any answer given here. Go and see a solicitor or a taxation specialist who is experienced in second property ownership and CGT - it will cost you but could save you a considerable amount in the long run
    Originally posted by capital0ne
    LOL, well I would because I know that all 3 people who replied have read the SDLT guides and manual and are giving the correct answer. Indeed in the case of SDLTgeek we have already had instances where their advice was more accurate than a solicitor's.

    https://www.gov.uk/guidance/stamp-duty-land-tax-buying-an-additional-residential-property

    https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm09730

    https://www.gov.uk/government/publications/stamp-duty-land-tax-relief-for-first-time-buyers-guidance-note

    https://www.gov.uk/guidance/sdlt-transferring-ownership-of-land-or-property

    https://www.gov.uk/stamp-duty-land-tax/residential-property-rates
    • bikeman17
    • By bikeman17 8th May 18, 7:43 AM
    • 189 Posts
    • 22 Thanks
    bikeman17
    I'm going to call The Money Advise Service to get clarification. Based on their online calculator as this will be my next home I'm not excempt but will pay 1.49%
    • Pixie5740
    • By Pixie5740 8th May 18, 9:00 AM
    • 12,431 Posts
    • 17,658 Thanks
    Pixie5740
    I shall probably regret asking this.....

    Who collects the rent from Property 1 and declares the rental income on their tax return? You? Your brother? Both of you?
    • 00ec25
    • By 00ec25 8th May 18, 9:47 AM
    • 6,646 Posts
    • 6,229 Thanks
    00ec25
    I'm going to call The Money Advise Service to get clarification. Based on their online calculator as this will be my next home I'm not exempt but will pay 1.49%
    Originally posted by bikeman17
    a calculator is only as good as the data you input to it. Just the same as the advice you'll get on the phone will only be as good as the facts you tell them about

    Since there is no such 1.49% rate I assume that is the net % including the 0% banding. The whole point is "not exempt" in what context? You purchasing an additional property or you purchasing one after having sold the previous?

    One answer does not fit all
    • 00ec25
    • By 00ec25 8th May 18, 9:49 AM
    • 6,646 Posts
    • 6,229 Thanks
    00ec25
    I shall probably regret asking this.....

    Who collects the rent from Property 1 and declares the rental income on their tax return? You? Your brother? Both of you?
    Originally posted by Pixie5740
    Op has stated:

    Property 1 which is on let was only owned by me. We both owned the property together at once then I had it in my name and now wish to give him it back.
    Originally posted by bikeman17
    the only person with an entitlement (beneficial interest) to the income is the OP
    • 00ec25
    • By 00ec25 8th May 18, 9:56 AM
    • 6,646 Posts
    • 6,229 Thanks
    00ec25
    Yes but the OP also claims to have no interest in the property. Could be he's the legal owner but not the beneficial owner although I doubt it.
    Originally posted by Pixie5740
    I doubt it, given Op's standard of English, I interpreted his use of "interest" was in the context of him reading the question about "share" and thus explaining that he is now sole owner and that there are no "shares"
    • Pixie5740
    • By Pixie5740 8th May 18, 9:58 AM
    • 12,431 Posts
    • 17,658 Thanks
    Pixie5740
    This is confusing. You changed your reply by the time I'd posted my reponse which I've now deletered. Arghhh!
    • bikeman17
    • By bikeman17 8th May 18, 1:03 PM
    • 189 Posts
    • 22 Thanks
    bikeman17
    I had online chat with the Money Service and based on the question they asked, they used their online calculator, comment below:

    Nicole said:
    Okay. Because it's a joint property and you have previous owned a property, you will be charged £4,250.00 on a property valued at £285,000. This is at an effective tax rate of 1.49%. You can clarify this on our Stamp Duty calculator by clicking the link below: https://www.moneyadviceservice.org.uk/en/tools/stamp-duty-calculator
    -
    • 00ec25
    • By 00ec25 8th May 18, 5:23 PM
    • 6,646 Posts
    • 6,229 Thanks
    00ec25
    I had online chat with the Money Service and based on the question they asked, they used their online calculator, comment below:

    Nicole said:
    Okay. Because it's a joint property and you have previous owned a property, you will be charged £4,250.00 on a property valued at £285,000. This is at an effective tax rate of 1.49%. You can clarify this on our Stamp Duty calculator by clicking the link below: https://www.moneyadviceservice.org.uk/en/tools/stamp-duty-calculator
    -
    Originally posted by bikeman17
    i don't need an online calculator to do
    0% on the first £125,000 = £0
    2% on the next £125,000 = £2,500
    5% on the final £35,000 = £1,750
    total 4,250

    but that isn't the point.
    The point is should the higher rate apply.
    Did they answer that question based on you giving them full info as already explained on here and therefore confirm which of the 3 options you should select in their calculator?
    Last edited by 00ec25; 08-05-2018 at 5:27 PM.
    • bikeman17
    • By bikeman17 8th May 18, 6:45 PM
    • 189 Posts
    • 22 Thanks
    bikeman17
    The first option on the online calculator is the only drop down selection that gives you this value of stamp duty tax
    • Pixie5740
    • By Pixie5740 8th May 18, 6:49 PM
    • 12,431 Posts
    • 17,658 Thanks
    Pixie5740
    The options are poorly worded. Yes you are "buying your next home" because you currently rent but if when you complete the transaction you still own property 1 the option "buying an additional or buy-to-let property" would be the appropriate option.

    I feel like a broken record.
    • 00ec25
    • By 00ec25 8th May 18, 7:32 PM
    • 6,646 Posts
    • 6,229 Thanks
    00ec25
    The first option on the online calculator is the only drop down selection that gives you this value of stamp duty tax
    Originally posted by bikeman17
    agreed, but you have asked about 2 scenarios and so the 3rd drop down option "additional property" would apply in 1 out 2 of those scenarios

    in that case the higher rate would be
    3% on the first £125,000 = £3,750
    5% on the next £125,000 = £6,250
    8% on the final £35,000 = £,2,800
    total 12,800

    your post #11 presents 2 scenarios, the SDLT payable is:
    scenario 1 = £4,250
    scenario 2 = £12,800

    the maths is not what you need worry over, the point to worry over is will the disposal occur before the purchase and therefore will the data you input to the calculator be dropdown option 1 or option 3?
    Your initial posts imply that it will not and so it would be option 3 and you'd face 12,800 SDLT
    Last edited by 00ec25; 08-05-2018 at 7:35 PM.
    • katherineanddave
    • By katherineanddave 11th May 18, 10:26 AM
    • 11 Posts
    • 1 Thanks
    katherineanddave
    Advice would be gratefully received!
    My sister is a first-time buyer and purchasing a flat for 127.5k. She has 21k towards the deposit and I am loaning her 21k. The mortgage will be solely in her name. Our agreement is that I will have a beneficial interest in the property, going on the deeds as a beneficial owner, and on any future sale would receive back my loan and we will divide any equity as per the different amounts of monies put into the property.
    I own my own mortgaged house.
    Re the Higher Rate of SDLT will we have to pay £3875 as I am classed as buying a second home or does as my ‘chargeable consideration’ is less than 40k does this mean we pay none?
    • Pixie5740
    • By Pixie5740 11th May 18, 12:01 PM
    • 12,431 Posts
    • 17,658 Thanks
    Pixie5740
    Advice would be gratefully received!
    My sister is a first-time buyer and purchasing a flat for 127.5k. She has 21k towards the deposit and I am loaning her 21k. The mortgage will be solely in her name. Our agreement is that I will have a beneficial interest in the property, going on the deeds as a beneficial owner, and on any future sale would receive back my loan and we will divide any equity as per the different amounts of monies put into the property.
    I own my own mortgaged house.
    Re the Higher Rate of SDLT will we have to pay £3875 as I am classed as buying a second home or does as my ‘chargeable consideration’ is less than 40k does this mean we pay none?
    Originally posted by katherineanddave
    Is the mortgage lender aware that you will be lending your sister £21k and are planning on being a beneficial owner and being named on the deeds? If not what will happen when you are asked to sign a document declaring the £21k is a gift and not a loan?
    • katherineanddave
    • By katherineanddave 11th May 18, 12:25 PM
    • 11 Posts
    • 1 Thanks
    katherineanddave
    Yes, loan declaration for lender is signed, and Deed of Trust will be drawn up to reflect the arrangement.
    • SDLT Geek
    • By SDLT Geek 11th May 18, 1:50 PM
    • 270 Posts
    • 162 Thanks
    SDLT Geek
    The fact that you are taking a share in the property at all, however small, means the total loss of first time buyers relief from SDLT and the higher rates applying to the whole price.
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