Stamp duty - a question

[thub]

A simple question to those PHers in the know.

Under the current regulations, how do I calculate how much stamp duty to pay if I purchase 50% of my partner's house?

Thank you kindly.

[billynomates]

Funnily enough I asked the same question some months back.

Lots of wrong answers by the way.

Though it may make a difference depending if you are married or not?

I was... and nope....... no SD payable..


Mind you two solictors got it wrong

HTH Phil












>> Edited by billynomates on Wednesday 27th April 14:47

[rude-boy]

billynomates said:

Mind you two solictors got it wrong

Don't think you'll find I was one of them but wiould like to know...

[fido]

pretty sure divorcees are exempt - about the only good news for a (very) poor mate of mine.

as for marriages, SDLT depends on the amount of mortgage in the property. this may help.

http://money.msn.co.uk/MyMoney/Insight/RobinsRant/Comment/February112005/default.asp

[pdV6]

Are you buying "in" to the house or buying out your partner?

[gbbird]

If you are buying your partner out, whether you pay stamp duty depends on the amount of money/equity involved. Over a certain threshold (and i cannot remember what it is but £30k rings a bell) you will get stung, anything under it and you will be OK

[billynomates]

rude-boy said:

billynomates said: Mind you two solictors got it wrong Don't think you'll find I was one of them but wiould like to know...

I was referring to solictors I had advice from ......not on PH
You are off the hook

[simpo two]

Hmmm - so maybe you could save SD by buying a house in two stages, left and right or ground floor, first florr...?

[pdV6]

simpo two said:

Hmmm - so maybe you could save SD by buying a house in two stages, left and right or ground floor, first florr...?

Maybe under the old Stamp Duty rules, but alas no longer under Stamp Duty Land tax. Just one of the loopholes they've closed down.

[rude-boy]

billynomates said:

I was referring to solictors I had advice from ......not on PH You are off the hook

And breathe...

[billynomates]

rude-boy said:

billynomates said: I was referring to solictors I had advice from ......not on PH You are off the hook And breathe...

Big breaths here matey


Saved me a few bob.

To be honest and serious for a mo

When you really are pushed up against a wall and getting shafted.

The prospect of having to find something you haven't got is sink or swim time.

I count myself fortunate enough to be still swimming..

Just

[thub]

A bit more information to round out the question, since it doesn't seem so simple after all.

Her current mortgage is approximately 50% of the property's market value. If I sell my property my 50% contribution to her will pay off her mortgage. That 50% contribution would be funded by the equity from my house sale and a new (much smaller) mortgage for me.

[rude-boy]

thub said:

A bit more information to round out the question, since it doesn't seem so simple after all. Her current mortgage is approximately 50% of the property's market value. If I sell my property my 50% contribution to her will pay off her mortgage. That 50% contribution would be funded by the equity from my house sale and a new (much smaller) mortgage for me.

So what you need to know is:-

How much is the value of the equity you will be puting in from your sale plus half the total mortgae you will be obtaining. This figure is effectively the consideration you are paying for a half share in the property

If this is less than £120k (Ta a bunch Gordie)then you are home free. If not welcome to the world of 1% SDLT

PS

Glad to hear you are winning Billy!

[thub]

Thank you rude-boy. Looks like I'm into the £120k plus region, meaning 1% of the whole amount?

[rude-boy]

thub said:

Thank you rude-boy. Looks like I'm into the £120k plus region, meaning 1% of the whole amount?

Yep, 1% on the whole of the consideration you are putting in. (eg consideration =£150k SDLT=£1,500.00

please remember that it does go up at £250k though. Trust me if you are in that bracket forget it 3% on the whole...

[mybrainhurts]

In these circumstances, this is State Theft.

If the house value is £240k and one divorce partner buys out t'other, is the State Theft 1% of £240k, or 1% of £120K.....?

[pdV6]

mybrainhurts said:

In these circumstances, this is State Theft. If the house value is £240k and one divorce partner buys out t'other, is the State Theft 1% of £240k, or 1% of £120K.....?

The latter I think, assuming the o/s mortgage is £240k and there's no other cash changing hands in respect of equity.

[rude-boy]

pdV6 said:

mybrainhurts said: In these circumstances, this is State Theft. If the house value is £240k and one divorce partner buys out t'other, is the State Theft 1% of £240k, or 1% of £120K.....? The latter I think, assuming the o/s mortgage is £240k and there's no other cash changing hands in respect of equity.

Nope, WHen it is a divorce then there should be a Consent Order sealed by the court which will direct who is to buy out who, etc. A transfer resulting from an order of the court in connection with divorce is exempt from SDLT under Schedule 3 paragraph 3 Finance Act 2003.

It's when you aren't married that it costs - big time.

[pdV6]

rude-boy said:

WHen it is a divorce then there should be a Consent Order sealed by the court which will direct who is to buy out who, etc. A transfer resulting from an order of the court in connection with divorce is exempt from SDLT under Schedule 3 paragraph 3 Finance Act 2003.

Cool. I guess the answer to Q9 (relief) on the SDLT1 form is "28 - Other" then? Seems like a bit of an oversight not to have something as common as a court order covered by a specific code.

But then nothing about the new SDLT system suprises me any more...

[rude-boy]

pdV6 said:

rude-boy said: WHen it is a divorce then there should be a Consent Order sealed by the court which will direct who is to buy out who, etc. A transfer resulting from an order of the court in connection with divorce is exempt from SDLT under Schedule 3 paragraph 3 Finance Act 2003. Cool. I guess the answer to Q9 (relief) on the SDLT1 form is "28 - Other" then? Seems like a bit of an oversight not to have something as common as a court order covered by a specific code. But then nothing about the new SDLT system suprises me any more...

Nope.

You use SDLT60 not SDLT1. Plus you also have the added benefit of not having to send it to the IR and wait for them to send you and SDLT5, with SDLT60 you only have to send the signed form to the Land Reg with your application