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Where Taxpayers and Advisers Meet

Joint mortgage with dad SDLT help please.

Srphoto
Posts:1
Joined:Wed Apr 05, 2017 12:17 pm
Joint mortgage with dad SDLT help please.

Postby Srphoto » Wed Apr 05, 2017 12:23 pm

Scouring the Web I've been unable to find an answer that I understand!

I own a property with my ex, and I am buying her out of her share in the property. I am doing a transfer of equity and adding my dad, and getting a mortgage with him.

He owns a home (jointly with his wife and father) where he will remain.

The house is worth 180k with 133k left to pay. I will be paying my ex 25k to release her from the house.

A- what SDLT is payable on this property? Is it half due to me only.owning this home?

B- are there any ways that SDLT can be reduced? Would a tenancy in common with me having a 99% share in the property and my dad 1% achieve this?

C- how do I go about this!?

Thanks in advance.

someone
Posts:691
Joined:Mon Feb 13, 2017 10:09 am

Re: Joint mortgage with dad SDLT help please.

Postby someone » Thu Apr 06, 2017 4:28 pm

There are others much more knowledgeable than me on this forum and there are some bits of SDLT regs that I don't know about but I think:

Consideration is 133/2+25 = 91.5K

That is below the 125K limit so there will be no normal stamp duty to pay.

However, as your dad already owns a home there will be the additional rate SDLT to pay:
3% of 91.5K is 2745

I don't think there are any ways to reduce the stamp duty unless you can somehow get the mortgage without putting your dad's name on the deeds. The two ways I can think of is possibly he can act as guarantor or possibly he can take out a mortgage on his own home and pay down enough of your mortgage to allow you to borrow the rest on your own.

Either way I think the risks to your dad are higher than being on the deeds of your house. This way, if the mortgage isn't paid, it's your home at risk. If he acts as guarantor or borrows against his own home then he's got a lot more at stake if the mortgage isn't paid.

If your dad is not putting in any money but just enabling you to have the mortgage then it would be reasonable for the beneficial interest in the property to be 100% to you. This will avoid further CGT issues if/when you come to sell and move to a new home. But changing the beneficial interest doesn't (I believe) change the SDLT position at all but maybe someone else will come along and confirm that.


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