Stamp duty help - am I screwed?

jonessa

jonessa

jonessa

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16 Nov 2014
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532
Last year (August) my mother decided to gift me and my brothers a 25% share in her house which is owned outright. She still currently lives there. The property was valued at around £160,00 at the time. I am named on the deeds.

In January, we decided we were going to move home (We bought our house 5 years ago).

We've agreed a purchase on a new home. I'm filling in the stamp duty questionnaire and there is a question regarding a beneficial interest in any other property. I went cold and sweaty and it suddenly dawned on me I could be deemed to have ownership of 2 properties and therefor liable for an additional £15,000 stamp duty - money i don't have.

As I don't have more than £40,000 worth of interest in this property, do i still have to pay the higher rate of stamp duty?

As I am replacing my primary residence, am i exempt?

If I relinquish my 25% ownership, will this cause any issues?

If anyone can help, i'd greatly appreciate it. I can't speak to my solicitor until Monday
 
sja360 said:
Are you ad your brothers buying the new property for your mother?
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No, my mother still lives in her house. I am named as a 25% owner of that house. My 2 brothers also have 25%. My mother retains the final 25%.

I have sod MY house and have agreed to buy a new house for myself.
 
If you are moving your primary residence then you would only be liable for the standard stamp duty rate.
 
You are fine as it's replacing an existing PR (primary residence);

SDLT-diagram.jpg


You are taking option one (Two+) at the first junction and then the option one (Yes:) at the second junction.

Image taken from the official Gov website regarding SDLT.
 
a1ex2001 said:
Ask your solicitor should take them about 60 seconds to give you a definitive answer you won’t get here.
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Definitive answer in the post directly above yours, with the official Government website as a source and handy flow diagram clearly explaining the exact situation the OP is in.
 
Also worth remembering with regard to stamp duty, when they ask how many properties you own, they are only bothered with outright ownership.

Part ownership of a property does not count.

I was in exactly the same situation as OP and moved 3 times while also having 30% share in parents house, never paid extra stamp duty on any purchase, as it was not classed that I fully owned parents house.
 
Mmm, that's interesting. My GF and I are 50/50 on a B2L and the house we live in. We had to pay the Stamp Duty for the B2L initially on purchase, and also the additional 3% when we bought our primary residence house. So, if say the B2L property was 51/49 in my name and the house was 51/49 in her name, we wouldn't have had to pay that extra 3% SD?!?!
 
Entai said:
Also worth remembering with regard to stamp duty, when they ask how many properties you own, they are only bothered with outright ownership.

Part ownership of a property does not count.

I was in exactly the same situation as OP and moved 3 times while also having 30% share in parents house, never paid extra stamp duty on any purchase, as it was not classed that I fully owned parents house.
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Thanks for this, and indeed thanks to everyone else with their responses.
 
You mother could potentially be hit as a gift with reservation of benefit.

As she still lives in the property it will fall into her estate when she passes.

Depending on her other assets this could have IHT consequences.
 
dante6491 said:
You mother could potentially be hit as a gift with reservation of benefit.

As she still lives in the property it will fall into her estate when she passes.

Depending on her other assets this could have IHT consequences.
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My parents gifted the share in their house to me over 23 years ago now so no issues with GRoB, at least when I mentioned it to the solicitor she said no issues it does not count in our case.

My father passed away 15 years ago and my mother 2 years ago, and estate value is below threshold for IHT, so no issues with any of it.
 
Entai said:
My parents gifted the share in their house to me over 23 years ago now so no issues with GRoB, at least when I mentioned it to the solicitor she said no issues it does not count in our case.

My father passed away 15 years ago and my mother 2 years ago, and estate value is below threshold for IHT, so no issues with any of it.
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As above, my mother's estate won't be worth enough to qualify for IHT.
 
IHT is less likely to be an issue - more likely in this day and age is your "share" or bothers share can form part of divorce proceedings etc in the future. Recently involved in a case where parents gifted 50% of the house to their only son (retaining the other 50% themselves) - 2 years later, he's getting divorced and his 50% share in the house (around 300k for his share) is now forming part of his assets for his divorce.

Be careful with gifts as disinheritance becomes a factor to consider as well.
 
booyaka said:
IHT is less likely to be an issue - more likely in this day and age is your "share" or bothers share can form part of divorce proceedings etc in the future. Recently involved in a case where parents gifted 50% of the house to their only son (retaining the other 50% themselves) - 2 years later, he's getting divorced and his 50% share in the house (around 300k for his share) is now forming part of his assets for his divorce.

Be careful with gifts as disinheritance becomes a factor to consider as well.
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Yep. Spent 3 years in court and hundreds of thousands on legal fees.

If your married don’t borrow, gift or have any of your parents assets in your name.
 
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