Part exchange stamp duty

[GinnyP]

I wonder if anyone can help me? I may be buying a house which has been valued by an estate agent at £275000. The vendors want to buy my house (valued at £189950) as a part exchange as they are down-sizing. We will both save estate agents fees but if we agree together a price of £250000 for theirs and £165000 for ours this will leave us with the same price difference but put my purchase under 3% stamp duty rate. Is this legal?
Many thanks

[brownia]

I used to work for HMRC Stamp Taxes and am now a SDLT Consultant.

Unfortunately, the SDLT is based on the market value of the property, so you will have to pay 3% tax with the other party paying 1% tax.

It gets worse if you and the vendors are linked in any way (such as being related) as you would both have to pay tax on the combined market values of the properties, i.e. 3% of £440,000.

Please do not hesitate to contact me with further queries at ir.brown@yahoo.co.uk

Regards
Ian

[brownia]

P.S.

Used the wrong figures for above - if you and the vendors are linked you would both have to pay SDLT based on the combined market values, being 3% of £464,950 (not £440,000).


Ian

[colinmb]

I'm having trouble selling my father's house which I inherited on his death. I'm at the top of a chain. The vendor of the house at the bottom of the chain has not been able to sell his house, and I'm thinking of unlocking the chain by turning it into a circle - I buy the house at the bottom of the chain, which enables me to sell my house at the top.
The chain would consist of 3 links. Me at the top, this guy at the bottom, and another in the middle. None of us knows each other.
I've a couple of questions arising from this, if anyone is knowledgeable and kind enough to answer.
1) Is it possible to link the transactions on an all-or-none basis such that I don't end up with owning two unwanted houses at the end (my purchase goes through but my sale fails).
2) What happens re CGT on my sale of my father's house? Eg. If I sell it for £250k but in order to do so I've had to buy another house for £100k. To me it's a kind of part-ex, and I shouldn't be assessed as having realised the full £250k from the sale, but I presume the taxman won't take such a generous view, and I'll end up having to pay CGT on a gain I never had?