I hope someone on here can provide a view.
My partner's father (unmarried) unfortunately passed away when she was younger. Soon after, her mother was advised to reallocate ownership of their mortgage-free family home (likely thinking about inheritance tax, if the worst was to happen). As such, the family home (worth circa £500k) is currently owned 50% by the mother and 25% each by my partner and her brother (neither of whom have bought another property).
My partner and I are now looking at getting a joint mortgage and are wondering whether her 25% ownership of the family home will lead to us having to pay the additional home 3% SDLT surcharge. My initial thoughts are 'yes'.
Conscious that this isn't a common scenario and something that the 3% was targeted at, I'm wondering whether the most efficient get over having to pay the additional 3% is to transfer my partners 25% to her brother (who still lives at the family home), for zero consideration (ignoring, for now, the risk that her brother runs away with it...). My partner will not be living in the family house if we were to move to our new place, so she would be getting no residual benefit, post transfer.
Her brother could then transfer it back to my partner, for zero consideration, post us completing on our jointly owned property. In the back of my mind, I'm thinking that may lead to some form of taxable event for her brother as he will still be benefiting from living in the family home.
perhaps a better option would be for her brother to hold on to his now 50% share and then transfer the whole 50%, for zero consideration, to my partner, when he comes to buying his own property. It would then be a trust exercise as to the siblings sharing their 50% share if the family home was ever disposed. There may be some additional CGT due (as the siblings couldn't benefit from their respective AEA amounts).
I welcome any thoughts.