how to claim back 3% stamp duty on 2nd property

[dharms]

Hi,

I was hoping for your help and advice to understand if what I intend to do will help me claim back 3% stamp duty on my current property.

Scenario:

My parents weren't very wealthy so after renting for many years we only bought our ex-council house under the right to buy scheme once I started earning after university. Therefore myself, my dad and mums name are on the mortgage which is now tiny as I've nearly paid it all off.

I wanted to buy my own flat to be closer to work and have my own independence and decided to buy before the April 2016 deadline for 2nd properties as I didn't want to pay the extra 3% but unfortunately my developer didn't complete the build until June last year so I had to pay the extra 3% (ouch). Its my main residence during the week although I do go back and stay with my parents on a lot of weekends.

I think I have worked out a method by which I can claim back the 3% and wanted to run it past some experts as this is completely out of my comfort zone and would greatly appreciate your help:

Claiming back the 3% - Steps to take

1) Pay the remaining mortgage as I have read there will be no SDLT if I want to gift my share of my property to my parents

2) Equally gift my share of my parents house to both parents (within 3 years of purchase of my new flat). I believe the 7 year gift rule applies to me and not my parents as I am gifting? How do I legally do this? Do I need a solicitor? Does this involve removing my name from HM land registry? Will the solicitor do this or is there a form I am meant to use?

3) Now I have gifted my share of my parents house, I believe this is equivalent to selling my previous main residence, therefore I can fill in the below form to claim back the 3%, do you agree? Should I fill this in myself or use a lawyer? How do HMRC know I have sold my main residence, by seeing that my name is no longer on the land registry?
https://www.gov.uk/government/publicati ... properties

4) Ask my parents to create wills that they pass on their property and estates to each other only, and once only one parent survives pass on their estate to me. I believe I would get the property (worth roughly 500K) with no inheritance tax as its below the joint threshold as per this article?
http://www.which.co.uk/money/tax/inheri ... d-who-pays


Does this sound like a good plan and it will work? Any suggestions or advice you can give will be greatly appreciated?

Cheers,

Dharmesh.

[bd6759]

Presuming that your share of the mortgage is less than £40,000, a simple declaration of trust will suffice. That will say that the property is held in the names of A, B and C for the sole benefit of A and B. You are C.

But what you have said is perfectly correct.