Adding wife to house/ mortgage

[Casa1862]

My fixed rate is coming to an end shortly, I wanted to add my wife at remortgage however I'm getting conflicting advise, from no problem or yes she can but wie'll have to pay stamp duty. Is this true even if married?

We are also applying for a joint btl mortgage tomorrow, now not sure if I should do it in joint names or just mine, either way it is affordable, my situation is a follows::

Main house/mortgage - in my name
Btl house/mortgage 1 - in my name
Btl house/mortgage 2 - applying tomorrow, can be either mine or joint.

My reason for transferring is I don't want any problems should something happen to me, I'd want everything to pass to my wife with minimum issue, would i be better off putting it in a will if too complicated, My ultimate goal was to end up with all three properties in joint names, no problems with trusting the wife before I get asked.

Thanks in advance

[Casa1862]

Sarnie said:

You'd need to post the figures involved to be able to decipher if SDLT is due......

Thanks for the promy reply.

Main house/mortgage - in my name - value £475k mortgage £130k

Btl house/mortgage 1 - in my name - value £190k mortgage £117k

Btl house/mortgage 2 - applying tomorrow, can be either mine or joint. purchase price £142k, deposit £35500, mortgage £106.5k

Let me know if any more info needed, thanks

[Casa1862]

Seems difficult to find out if we'll get caught for the 3% additional SD, if so that's £1900 (on £65k)on our residential property, if it's only standard SD then £65k is below the threshold.

I'd certainly want my existing btl in joint names for the 2 x capital gains tax, agbut looks like we'll get caught for 3% stamp duty on that as well. Seems a bit unfair as SD has already been paid on all properties and no extra money has been exchanged.

[Casa1862]

Getting so much conflicting info, however first time I've heard that half SD on the value of the property, general consensus seems to be half the mortgage. Last poster, what do you base this on?

Wish I had just done them at the time but was told no problem adding a spouse, removing much more difficult, doesn't seem to be the case.

Can I not gift half the property?

[Casa1862]

Sounds like I need to take advice, I'm certainly not paying SD on my residential home, half of £475k is several thousands, I mistakenly assumed it would be a common transaction to put a single name property in joint names, surly it must happen all the time when couples get married and want joint ownership of their home, do they all end up pay SD?

[Casa1862]

UpTheIron said:

P, as per others have since suggested... half the value of the property.

• However* example 2 here: https://www.gov.uk/guidance/sdlt-transferring-owne... suggests otherwise. I'm very surprised at this (if accurate) as surely it is a massive loophole? Taking the example, what if the mortgage was for <£125k... no SDLT payable although the value of the share transferred is over the threshold? If it is accurate then it's interesting to me as it could make for some CGT avoidance.

That is the very link I was about to post, my understanding was that if standard rate SD applied then half of the remaining mortgage £65k would not attract SD. Worst case, if 3% rate applied then I'd get my mortgage down to £80k, and miss additional SD as wife's share was £40k. Now that I'm being told it's on the value of the house then that throws the plan out, in any case that was my valuation, surly in a case like mine they wouldn't expect me to instruct a professional valuation to get the correct amount to pay, Doesn't sound right to me.

Also, on the link it mentions no SD if gifted, I'm not expecting any money so is that not a gift?

Thanks for all the info by the way.

Edited by Casa1862 on Thursday 21st April 14:16

[Casa1862]

BoRED S2upid said:

Unless things have changed in 4 years then all you need to pay is a lawyer to change the names on deeds we did it - wife came on my deeds I went on hers joint mortgages job done. Nobody is selling anything to anyone.

This is what I was told!!

[Casa1862]

Sarnie said:

Just because cash isn't being exchanged, the person being added is gaining a property, therefore that gain is taxed via SDLT.........

I understand that but what is the SD based on, house value which some here seem to suggest or the mortgage as the government link seems to suggest? I've even asked an accountant and he's not too sure, particularlary if 3% or standard rate will apply. Must be thousands of people in my situation wanting to add partners so they have joint ownership.

I can't find a number for HMRC to ask them, they just refer you to there website, anyone got a number?

[Casa1862]

BoRED S2upid said:

Do you need her to take on half the mortgage? Gift her half, name on deeds mortgage in your name seems to tick the boxes. I can see if half the mortgage has to be in her name how that could be her buying half your house.

I don't need her to be on the mortgage for financial reasons, just land registry would be OK if it avoided SD however I don't think the mortgage company will agree to this, they'll want her on the mortgage which I understand.

I want the residential property in joint names In case something happens to me my wife can keep the house and continue paying the mortgage without issue, even though I'm insured to cover the outstanding mortgages. My wife wont be in a position to reapply but will be able to continue paying if that makes sense, it gives my family options.

[Casa1862]

Eric Mc said:

Stamp Duty does not exist. It was abolished over ten years ago. It was replaced by quite a different animal called Stamp Duty Land Tax (SDLT) - which has nothing to do with the stamping of physical documents (which is why Stamp Duty was so called).

SDLT is charged on "consideration". This is what passes between two parties when something is sold. It is normally cash - but it can be something in lieu of cash, like taking on the responsibility for half of an outstanding debt - such as a mortgage.

Ok thanks Eric, so in my case it's on the remaining mortgage not the value of the house, need to find now if standard rate or additional rate. Think I'm making progress!!

Edited by Casa1862 on Thursday 21st April 18:30

[Casa1862]

Might be of interest if anyone is in the same position, I finally got hold of someone at the SDLT department and they confirmed that SDLT was only payable on the remaining mortgage NOT the value of the house.

As my wife is linked to me, regardless that she has no existing properties to her name she'll still pay the additional 3% on her half. A bit late now but should have done it before the April deadline, I've got no choice (apart for pay the tax) to reduce the mortgage to £40k (her half) and do it then.

Think this will catch out a lot of people, it's a mess the way this was handled, the final consolation was about two weeks before the new rues where introduced so couldn't really have got a definitive answer.

I'm still going to write the them to ask about the "Gift" which mentions no SDLT and if that applies to us as I'm not expecting anything in return.

From the government website

"If the transfer is a gift and there’s no consideration, SDLT doesn’t normally apply."

Edited by Casa1862 on Friday 22 April 12:31

[Casa1862]

Eric Mc said:

Exactly. "Consideration" is not just "money", but also "money worth".

Fair enough, I assume it could apply when no mortgage exist and you are gifting the property, hence no consideration. Either way I've got my answer and thanks to everyone's help. Wish I started looking before April though.