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  • FIRST POST
    • Horchata
    • By Horchata 16th Apr 19, 10:39 AM
    • 2Posts
    • 1Thanks
    Horchata
    Help to Buy eligibility - First Time Buyer - Complex Case
    • #1
    • 16th Apr 19, 10:39 AM
    Help to Buy eligibility - First Time Buyer - Complex Case 16th Apr 19 at 10:39 AM
    Hi all,

    I wonder if anyone can help me, as I don't seem to be able to find a concrete answer and have come across conflicting views.

    I would like to buy a property in the UK and to achieve this would like to take advantage of the various Help to Buy schemes for first time buyers. I have never purchased a property.

    However a few years ago, my father who lives abroad, updated the deeds of his foreign property to my name whilst retaining the usufruct, or right to live at the property, until his death. I have only retained the ‘bare ownership’ and have no right to sell or rent it, or do anything with it. For all intents and purposes the property is my father’s until his death. My father is the sole beneficiary at this time.

    I understand that in the UK I would be considered (as the equivalent) a Trustee rather than the beneficiary of the property, which for tax/ownership purposes etc, liability would fall with the beneficiary (my father) rather than myself.

    Would I therefore still be eligible for the Help to Buy schemes and stamp duty relief which comes with being a first time buyer?

    Thank you
Page 1
    • letThemPlay
    • By letThemPlay 16th Apr 19, 11:49 AM
    • 88 Posts
    • 299 Thanks
    letThemPlay
    • #2
    • 16th Apr 19, 11:49 AM
    • #2
    • 16th Apr 19, 11:49 AM
    Hi,

    Unfortunately it sounds like you fall into the same camp as my partner, who's parents inherited a house in France put it under her name whilst keeping the right to live at the property.

    Going through this process currently and my partner is not eligible for any Help to Buy schemes, and the stamp duty is worse as it counts as a second property so incurs the 3% surcharge on top of the normal stamp duty (So rather than paying 0 we are paying close to 9000 for SDLT).

    I can't guarantee anything as I'm not a solicitor but it sounds like you are in the same situation we have.
    # 047 'Save 12K in 2019' - 4992.49 / 12000 41.60%
    # 074 'Save 12K in 2015' - 4379.25 / 4000 109.48%
    • Horchata
    • By Horchata 16th Apr 19, 4:29 PM
    • 2 Posts
    • 1 Thanks
    Horchata
    • #3
    • 16th Apr 19, 4:29 PM
    • #3
    • 16th Apr 19, 4:29 PM
    Well according to the HMRC SDLT guidance notes:

    "Relief is not denied by virtue of a previous acquisition as a trustee unless the purchaser was also a beneficiary of the trust."

    So that - to me - could only mean that as the 'Trustee' and therefore NOT the beneficiary (my father), as the terms are strictly that he exercises full authority over the property and not me during his lifetime, I would be exempt from the SDLT liability? Is there any argument to suggest otherwise?

    And surely, if according to the rules the beneficiary is liable for stamp duty, and the Trustee as well, wouldn't that be double taxation? It doesn't compute.

    Really grateful for any further contributions and help on this.
    • letThemPlay
    • By letThemPlay 17th Apr 19, 12:16 PM
    • 88 Posts
    • 299 Thanks
    letThemPlay
    • #4
    • 17th Apr 19, 12:16 PM
    • #4
    • 17th Apr 19, 12:16 PM
    https://www.blakemorgan.co.uk/attachments/189836/10_SDLT_first_time_buyer_s_relief_18.11.18.pdf

    Example 3.3.3 talks about this, it sounds like it differs depending on the country where the usufructs originates and each version of the usufructs need to be considered separately.

    So your situation might be different to mine depending on where the property is located, with their being no direct equivalent in UK law, I would talk to a solicitor who can do the research for you.

    Fingers crossed you get a better outcome than mine.
    # 047 'Save 12K in 2019' - 4992.49 / 12000 41.60%
    # 074 'Save 12K in 2015' - 4379.25 / 4000 109.48%
    • Gwendo40
    • By Gwendo40 17th Apr 19, 2:51 PM
    • 268 Posts
    • 288 Thanks
    Gwendo40
    • #5
    • 17th Apr 19, 2:51 PM
    • #5
    • 17th Apr 19, 2:51 PM
    https://www.blakemorgan.co.uk/attachments/189836/10_SDLT_first_time_buyer_s_relief_18.11.18.pdf

    Example 3.3.3 talks about this, it sounds like it differs depending on the country where the usufructs originates and each version of the usufructs need to be considered separately.

    So your situation might be different to mine depending on where the property is located, with their being no direct equivalent in UK law, I would talk to a solicitor who can do the research for you.

    Fingers crossed you get a better outcome than mine.
    Originally posted by letThemPlay
    I'm struggling to see what's ''unfortunate'' about yours or the OP's situation, or why you should be treated any differently than how you have been.
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