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Where Taxpayers and Advisers Meet

SDLT when re-mortgaging

a92link
Posts:1
Joined:Tue Apr 02, 2024 1:50 pm
SDLT when re-mortgaging

Postby a92link » Tue Apr 02, 2024 1:52 pm

Hi,

I am currently re-mortgaging. My wife will now be added to the Deed. The outstanding mortgage is circa £460,000 and she owns another property.

Will we/she have to pay any stamp duty or second home stamp duty?

Your help is much appreciated.

A

someone
Posts:696
Joined:Mon Feb 13, 2017 10:09 am

Re: SDLT when re-mortgaging

Postby someone » Wed Apr 03, 2024 11:08 am

SDLT potentially, yes but probably not:

You are remortgaging but it's the outstanding mortgage at the point of the remortgage that matters, not the new mortgage.

She will pay SDLT on a proportion of that outstanding mortgage equal to the proportion of the equity in the property she is assuming. For SDLT purposes, it's deemed 50/50 for Joint Tenants.

If the current outstanding mortgage is 460K and she's getting 50% then the consideration for SDLT is 230K - so there will be no SDLT to pay.

There is no second home SDLT uplift for transfers between husband and wife.

FYI, solicitors don't understand these rules well and there's a deadline for submitting the SDLT return after the transfer of equity, so make sure your solicitor is on board with the calculations BEFORE you actually do the transfer. You don't want them to suddenly say "You owe 24K in SDLT" and then have to start convincing them you don't when you've only got 30 days to get the form submitted! They have software to fill in the SDLT return but that's only as good as the information they put into it - for example the special rules for transfers between husband and wife regarding second home SDLT. The calculation of the consideration (which is deemed in legislation for SDLT to match the proportions of ownership) can also be problematic for solicitors as legally you will both be wholly and severally liable for the entire mortgage.

someone
Posts:696
Joined:Mon Feb 13, 2017 10:09 am

Re: SDLT when re-mortgaging

Postby someone » Wed Apr 03, 2024 11:10 am

She will pay SDLT on a proportion of that outstanding mortgage equal to the proportion of the equity in the property she is assuming. For SDLT purposes, it's deemed 50/50 for Joint Tenants.
I didn't word that very well.

What matters is the proportion of the beneficial interest that is being assumed - and that tells you the proportion of the mortgage that is being assumed for SDLT purposes.


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