SDLT

[dalenorth]

My brother is wanting to buy me out of my late mothers property that we inherited last year, the value is £150k and will be his second home. I'm trying to work out his SDLT which I assume is £2.5k, can anyone confirm or set me straight?

[Alpinestars]

£5,000.

125 @ 3%, plus 25 @ 5%.

[dalenorth]

So even though he inherited half already, he still pays the full amount?

[Alpinestars]

No, that wasn't clear to me. Is he paying half of 150?

If he has inherited half without taking on a mortgage, he won't pay SDLT on that bit.

[dalenorth]

He inherited half the property which is valued at £150000, he is raising £75k through a mortgage and paying me the £75k for full ownership.

[Eric Mc]

What is the consideration he is paying for the purchase of the property?

SDLT is based on consideration. It is a transaction based tax.

[dalenorth]

I suppose in theory he's buying half the property at £75k, but in honesty I'm not sure how they will view it, hence the questions.

[Sharted]

I would look into exemptions for inherited property.

[Jockman]

Sharted said:

I would look into exemptions for inherited property.

It's no longer inherited. It's now a normal sale.

[Eric Mc]

dalenorth said:

I suppose in theory he's buying half the property at £75k, but in honesty I'm not sure how they will view it, hence the questions.

I'll ask again - how much is he physically handing over to acquire the rest of the property (and that includes the amount he is having to borrow)?

[dalenorth]

75k Eric.

[Jockman]

What makes you think it's different to £2,250?

[Alpinestars]

If he has inherited half, without taking on the mortgage attaching to that half, and he is then paying £75k to you for your half, SDLT will be £2,250. How he funds the £75k paynment to you is irrelevant.

However, if he inherited his half cum mortgage of £75k and is paying you £75k for your half, SDLT is £5k.

[Eric Mc]

That's what I was trying to get out of the OP. Even though the OP has stated that the purchaser is paying HIM £75,000, he hasn't clarified completely whether he is also taking on the already existing £75,000 mortgage as well.

If the buyer is also taking on the mortgage, he is really paying £150,000 for the share of the property (not just £75,000) - and the SDLT will therefore be based on a purchase price of £150,000.

[dalenorth]

Alpinestars he inherited the first half without mortgage so I believe your calculation of £2250 is correct. Many thanks for your help guys!

[Alpinestars]

dalenorth said:

Alpinestars he inherited the first half without mortgage so I believe your calculation of £2250 is correct. Many thanks for your help guys!

No problem.