Part gift, part sale of property to daughter.

[JM2010]

What is the position with stamp duty if a house is part sold and part gifted, if the sale price net of the gift is less than the threshold, but the "market value" might exceed the threshold.

I jointly own a house with my ex-wife which has mortgages, debts etc. and it has to be sold as part of the divorce settlement with various debts paid off. The probable sale value on the open market would be between £120k and £135k, but it is very hard to be certain. It is arguable that the house is actually worth less than £125k in the current market, but it is somewhat borderline.

Something has to be done soon as interest only mortgages come to an end this year, and it looks like we cannot re-finance them.

My daughter would like to buy the house off of us, but cannot raise the finance to pay the market price, but she can raise the finance to meet the terms of the settlement, clear the debts and pay off her mother. There are reasons why I don't wouldn't remain a joint owner. I am prepared to gift the equity to her that I would get were the house sold at the market price (if someone were to come along and offer it!). There are no CGT considerations, and my daughter would be taking on her own mortgage.

This would involve selling the house to her for about £90k.

Assuming the value of the house were to be deemed over the £125k threshold, would the effective price for the purposes of stamp duty be the £90k, or would it be the actual market value.

[section 44]

This SDLT and not stamp duty.

Your daughter would be liable to SDLT based on what cash she gives for the house and the value of any associated debts that she assumes or liabilities that she meets on behalf of you/your wife.