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Where Taxpayers and Advisers Meet

Re Higher rate SDLT on first time purchase with share of inherited holiday home

adymock
Posts:1
Joined:Tue Sep 19, 2017 1:30 pm
Re Higher rate SDLT on first time purchase with share of inherited holiday home

Postby adymock » Tue Sep 19, 2017 1:43 pm

My wife inherited a 1/6 share of a holiday home worth circa £280,000 (just over £40k for her share) around 9 years ago from her father. We lived in my mother and father's home for 3 and a half years before buying our own home in January for £525,000. We were advised at the time that we were replacing our main residence and as such were not subject to higher rate SDLT. HMRC have now written to our solicitor to perform a compliance check. I have now read up on the internet and am confused as to whether I will be asked to pay this extra bill (which would knacker my finances).

Any thoughts as to:

1) is this worth arguing as I am sure the rules were not created to trap first time buyers like me?
2) can we gift away my wife's share to dispose of it? if so can it go to children? or her sister?

Help in general

SDLT Geek
Posts:232
Joined:Sun Apr 30, 2017 5:45 pm

Re: Re Higher rate SDLT on first time purchase with share of inherited holiday home

Postby SDLT Geek » Tue Sep 19, 2017 9:07 pm

Perhaps the answer could rely on a careful valuation as you are so close to the £40,000 threshold and valuers often talk of a discount of about 10% for an undivided share.

If for example a January 2017 valuation of the holiday home of £265,000 could be defended then with say a 10% valuation then your wife's share is below the £40,000 figure.

I do not believe that it will help for your wife to now transfer away her share in the holiday home. She has not lived in it as her only or main residence in the last three years, so a disposal now will not entitle her to a refund.

You describe yourself as a first time buyer. But was your wife? Had she previously owned (or had a share in) in a property she once lived in and disposed of? That could save the purchase from the 3% surcharge.


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