SDLT on Divorce Settlement

[philseward]

We have a slightly complicated divorce setllement (aren't they all) and I'm looking to ensure we don't attract SDLT on the transfer of the main family home as a result of the divorce settlement. Here's the summary of facts:

Wife and Husband jointly own a main family home valued at £340K
They have a joint interest only mortgage for £192K
Husband has an unsecured debt, and has agreed to fully assign his share of the house in return for Wife settling the debt - this is the basis of the divorce settlement.

However, wife needs to remortgage £192K as single mortgage (remove husband), but lender will not lend enough due to income and LTV:
Lender will remortgage up to 50% LTV (170k) provided wife has co-applicant (not just a guarantor)
WIfe's brother has agreed to be co-applicant, and to gift the additional cash to bring LTV to 50%

QUESTION: Does introduction of brother as co-applicant on mortgage attract SDLT to the divorce settlement transfer? Brother will be co-applicant on mortgage, but will have no beneficial interest/ownership in the property. Cash contribution is being provided as a gift without interest or repayment.

[jerome.lane]

Provided the brother has no beneficial interest, and the divorce/separation procedures are followed, there should be no SDLT in the circumstances described....as far as I can tell. I’m not sure if the lender will be treating this as a no beneficial interest arrangement for the brother but that’s more of a legal issue than a tax one.