SDLT Query - unequal shares

by **DHanson** on Thu Apr 21, 2011 7:34 pm

I plan to buy out my partners share of a property which is our main residence and would like to know if SDLT is liable.
We are not married and have a Deed of Trust in place 71:29 in my favour and a current mortgage balance of £95k.
The house was bought in 2004 for £240k and is now valued at £275k making her share £79,750. As I will be taking over the mortgage, for SDLT purposes do I have to take into consideration half of the mortgage balance or her 29% share of the mortgage?

Which is the correct method?
Using the former £79,500 + £47,500 (half mortgage) = £127,750, above the £125k threshold and liable to £1,277 SDLT.
Using 29% share it would be £79,500 + £27,550 = £107,300, well below the £125k threshold.

Advice would be gratefully received.

by **maths** on Thu Apr 21, 2011 8:50 pm

If the property has a current market value of £275K and your partner owns 29% her interest is valued at £79,750.

However, there is a £95K mortgage outstanding.

You would thus, i assume, be paying £79,750 comprised of £52,200 cash plus taking on her 29% of the mortgage of £95K (£27,550).

SDLT is thus based on the £79,750 consideration (ie nil).

by **DHanson** on Fri Apr 22, 2011 2:14 am

Thanks Maths for quick reply.
I can see now from your workings where I went wrong.

Thanks again

by **section 44** on Tue Apr 26, 2011 9:34 am

Even though no SDLT liability arises it would be a notifiable transaction and therefore an SDLT return would need to be submitted by you within 30 days of completion.