Is stamp duty applicable to remove brothers name from deeds.

[mikemos]

Ten years ago my wife and I bought a house. The cost was £100,000. My brother loaned me £10,000.
My wife and I put £20,000 deposit, leaving a balance of £70,000 motgage. My brother and I agreed, on him loaning me the sum of £10,000, and once it was paid back for his name to be removed from deeds. The house is worth between £240,000 and £280,000, the mortgage is at £71,000 including building and contents insurance.
Is stamp duty applicable on £10,000 loan, or is it on 1/10th of the total value of the house, or as a pecentage of the value of the house minus the mortgage?
Please can some-one advise me, as I would like to get an idea if Stamp duty would be due before I do anything.

kindest regards. Mikemos

[funcrusherbill]

Check the Land Register. If you and your wife owned the house and your brother only LOANED money, then his name should only be on the deeds as mortgagee, and can be removed via the Land Registry. If otherwise, ring the Stamp Office (in Bristol?)for advice.

[mikemos]

To Funcrusherbill,

Many thanks for your reply, because I was being told different things from lots of people prior to me post on this forum. The though was getting me depressed.

Regards. Mikemos

[accountant@uktaxshop]

Mike,

You say that your brother is on the deeds. Even if you have signed up for a 50/50 share, the transfer would not trigger stamp duty as the only value stamp able is the amount of the mortgage o/s on the portion gifted.

In this case less than £35,000, on which there is no stamp duty. (no duty under 60k)

The transfer would however trigger a capital gain on your brother. It is not clear from your post what share he actually owns. If it is just 10% this would not be too disastrous as he can use his personal allowances.

I would suggest you take some proper advice before you proceed - it will only cost a few £'s and save a lot of problems.

Regards,

James Smith
Chartered Accountant
www.jamesesmith.co.uk
01284 764436

[mikemos]

To James Smith,

Many thanks for your reply. In this case my
brother having loaned me £10,000 to put down on the £100,000 value of house at the time it was bought is 1/10th. But £10,000 out of £70,000 is 1/7th. Could you tell me which is the percentage
that will be taken into account?
What is the personal allowance for Capital Gains tax?.

Once again many thanks for your post. I certainly will seek proper advise. But this forum at least helps people like myself who know
nothing or little to get good information, tips to look into or to understand what could be involved.

Kindest Regards...........Mikemos

[accountant@uktaxshop]

Mike,

The % will depend entirely on how the deeds where drawn up in the first place. This is the first thing you need to look at.

The personal CGT allowance is £8200 for 2004/5.

Regards,

James Smith

[mikemos]

To James Smith & Funcrusherbill,

Thanking you kindly for your posts. More informed than when I first posted.
Thanks again and respect to you........Mikemos