Tax Forum :: Free Tax Advice

Hi

I currently own a property that I live in with my wife and kids; the mortgage/title is against my name.

We are currently buying another property, as struggling to sell the house and we had a buyer pull out; so going through a remortgage (buy-to-let) in joint names on the current property and then another joint mortgage for a new house.

Question, when I give 50% share of our current house to my wife would she need to pay stamp duty on it?

I have read topics on it and they talk about the outstanding mortgage v the property value. But when you buy a property the stamp duty is against the purchase price!

House is worth 155k, outstanding mortage will be 116k.

During this whole process we are purchasing another property which will be our main residence. I know I have to pay an extra 3% stamp suty on this, even though it is the main residence. Is there anyway around this, to pay the stamp duty on the buiy-to-let property instead; just seems crazy to have to pay the additional stap duty on the more expensive house, that we are actually going to live in!

We are only going to keep the buy-to-let property for 2 years (mortgage term) and then sell to hopefully reclaim the 3% I am having to pay on the more expensive property, and with the new tax legislation coming in 2020 it makes little to no sense for us to have a second house.

I also spoke to someone who said my wife might have to pay an extra 3% also in stamp duty costs on the buy-to-let.

The whole stamp duty is quite confusing.

Any clarity would be great.

A good start for you would be to look at this article in the Telegraph. http://www.telegraph.co.uk/personal-ban ... tamp-duty/ That deals with the purchase you ask about rather than the change in equity, where you should expect a proportion of the debt to count as "chargeable consideration" for the purposes of stamp duty land tax.

Thanks for this.

TBH I am still confused!

I currently own 100% of our current property, and about to give away 50% to my wife, then I would not own a 'major interest' in the property - so does this then mean if we jointly brought a new property as the main residence we would not have to pay the additional 3% SDLT?

Question, when I give 50% share of our current house to my wife would she need to pay stamp duty on it?

Assuming you own 100% of the beneficial interest and have sole legal title then a simple transfer of say 50% of the beneficial interest to wife would not precipitate any SDLT charge assuming she did not agree to take on any part of the mortgage liability.

However, adding her name to the legal title and jointly remortgaging precipitates an SDLT charge.

I wouldn't worry about the article. Whilst raising an interesting point it is unlikely HMRC will concede the point.

Hi maths, thanks for the response.

When you adding my wife to the mortgage precipitates to an SDLT charge, would this be @ normal levels, or an additional 3% surcharge?

But again assuming the SDLT charge would only be for her portion of the property and not the full value?

When you adding my wife to the mortgage precipitates to an SDLT charge, would this be @ normal levels, or an additional 3% surcharge?

As you at this time only own one property the 3% will not apply.

But again assuming the SDLT charge would only be for her portion of the property and not the full value?

Correct.

There are some changes to the 3% rules that are effective from today under the Autumn Budget that affect this type of transaction. Some transactions between spouses and civil partners are now excepted from the higher rates of stamp duty land tax for additional properties.