Adding Partner To Deeds...SDLT Implication?

[Zeemax_Mini]

Hi all,

Hoping for a bit of advice if possible!

My girlfriend lives with me in a house that I own outright and am in the process of selling. I've just had an offer accepted on a new property, which is a project and in its current state unmortgageable, but which will become our family home together. Once it's able to be mortgaged the plan is that she will take out a mortgage to effectively buy a share in the property from me so that I get some of my cash back out of it. My thought was it would make the most sense for me to buy it in my sole name, and then when she is able to raise a mortgage on it we would add her to the deeds and have a tenancy in common of different % ownership. Is that a sensible plan, or am I missing something like whether SDLT would be due if we added her at a later point?

Cheers!

Dom

[Zeemax_Mini]

Anyone?

[anonymous-user]

So far as I am aware there is no "husband and wife" Stamp Duty exemption.

SDLT is payable on any sale but all gifts are exempt.

[z4RRSchris]

any transfer of land that should attract a consideration, expect from an actual gift, you will pay SDLT on

[Zeemax_Mini]

anonymous said:

[redacted]

Thanks all. Yeah she could be put on from the outset and we'll have an agreement of what percentage she owns which I guess we would update when she gets her mortgage, if by doing so it saves the sdlt then we could do that (though thinking about it I guess she'd also have her first time buyers allowance wouldn't she, if we did it down the line?). It seems silly to pay sdlt now (forgetting the current exception) and then have to pay it again down the line just to add her to the deeds. If that really is the case then maybe we're best off just not having her on the deeds and having a legal agreement between ourselves.

Seems maybe it's more complicated than I'd imagined...surprise surprise!

Cheers, Dom

[Angpozzuto]

I don't mean to sound like an arse but if you're commited enough to a relationship that you're ready to build a home together do you really need to be agreeing who owns how much?

[Zeemax_Mini]

Angpozzuto said:

I don't mean to sound like an arse but if you're commited enough to a relationship that you're ready to build a home together do you really need to be agreeing who owns how much?

A fair question! I've built up a decent pot in the last ten years and I guess I'm probably over protective of it, as I need the lump to produce my income every year (buying wrecks and flipping them), so if I lost half of that it'd really damage my ability to make a decent living. My thinking is that once we're married she'll be entitled to that but before then I don't massively see the harm in keeping things a bit more split. I'm happy to take some risk and will gift her a share in it and split any profits down the middle etc, as I don't see the relationship breaking down...but if I can't really afford to just give away half the value of the property as I need it for my line of work. I don't see it that she'll be buying half of the property off me, more than she'll be raising finance on her half of it to enable me to carry on doing what I do. At the point of her raising finance on it I assume she'll have to be on the deeds for the mortgage, so I guess the question is just whether we do that now or at that point.

Dom

[anonymous-user]

Get an agreement or pre-nuptual agreement properly drawn up to record who gets what if things go wrong.

But bear in mind that if/when any kids are involved that piece of paper isn't worth a great deal.

[Zeemax_Mini]

Thanks - something to consider and that she's offered but doesn't feel right really.

It looks like the answer to my original question was above, that I can gift her half of the property when she comes to take out her mortgage. As there's no mortgage on the property I can gift her that that money to me? That seems to be what the gov website says unless I'm mistaken...if there was a mortgage on the property it'd be another story?

Dom

[Dg504]

Do you need the lump sum of the mortgage from her in terms of your cashflow?

If not, wouldn’t you be better her paying the equivalent of the mortgage repayment to you as ‘rent’, without taking a mortgage out. You’ll save thousands in interest over the years (dependant slightly on what values we’re talking about)

[anonymous-user]

Here’s where to start to find the answer

https://www.gov.uk/guidance/sdlt-transferring-owne...

[Zeemax_Mini]

Dg504 said:

Do you need the lump sum of the mortgage from her in terms of your cashflow?

If not, wouldn’t you be better her paying the equivalent of the mortgage repayment to you as ‘rent’, without taking a mortgage out. You’ll save thousands in interest over the years (dependant slightly on what values we’re talking about)

Yeah that's the thing, I'm not able to get mortgage finance because I'm self employed and my most recent project was my main residence so the profit on that isn't able to be used as proof of income. So really I want to buy the house cash, renovate it (it's not suitable for a mortgage at the moment) and she can get a mortgage on her half to release some of my equity. She'll end up with 50% of a valuable house for a fairly small mortgage. and I'll get a chunk of my money back out so I can do another project...that's the plan!

Dom

[Zeemax_Mini]

JPJPJP said:

Here’s where to start to find the answer

https://www.gov.uk/guidance/sdlt-transferring-owne...

Cheers I've gone through that a couple of times, it's just that it doesn't seem clear cut to me. If i had a mortgage and transferred her half of the property then there'd be SDLT to pay if it was over the threshold, but if it's owned outright then there wouldn't be (assuming it was a gift). If she then raised finance on her gift it seems to seem that'd be OK. Looking at the numbers I think it's probably a moot point as the chargeable consideration either way would be under £300k, and she'd have her FTB allowance to use.

Thanks for all the pointers.

Dom