SDLT on Staircasing
Posted: Wed Feb 07, 2018 5:48 pm
by buff
Hi,
Wondered if someone could help?
All the examples I can find online refer to when the first share bought is under the thresholds and therefore no tax was paid. Our situation is different to that in that we did pay stamp duty on the 50% we bought in 2004, so trying to ascertain what we would pay when staircasing to full ownership.
We purchased our 50% share in 2004 at £122,500 (based on a full asking price of £245k) and we paid stamp duty of £1,225 at the time.
If we now buy the other 50% based on a full value of £325k and therefore a payment for the further share of £162,500 what stamp duty would we be liable for?
Many thanks in advance
Re: SDLT on Staircasing
Posted: Wed Feb 07, 2018 6:50 pm
by SDLT Geek
Here is my SDLT calculation, no doubt someone will correct me if I am wrong.
Total amount paid is £122,500 and £162,500 for two linked transactions. That is £285,000.
Because the lease was granted in 2004, before 12 March 2008, you do have to revisit the 2004 return as a result of the staircasing. The total consideration is now £285,000. We need to look back to the slab rates of SDLT due in 2004. At the time the rates for transactions between £250K and £500K was 3%. You already have paid 1% of £122,500. You will now need to pay the remaining 2% of £122,500 which is £2,450.
You also need to pay SDLT on the £162,500 now paid. To work this out you start by working out what the SDLT would be now on the total of £285,000. We use current rates of SDLT, so assuming that the higher rates of SDLT do not apply (this is your only property?) the SDLT on £285,000 would have been £4,250 (calculated in slices at 0% at 2% and at 5%).
You only pay a proportion of this £4,250 though. The proportion is 162,500 / 285,000. That works out as £2,423.
So the total SDLT due as result of staircasing is £2,450 + £2,423 = £4,873.
You will find some HMRC guidance here: https://www.gov.uk/guidance/sdlt-shared-ownership-property and also in the HMRC SDLT Manual.
Re: SDLT on Staircasing
Posted: Thu Feb 08, 2018 2:58 pm
by buff
Thanks for your help with this and explanation - it does make sense I guess, although didn't think it was going to be that much.
Had assumed that as the value of the property when we bought half was under £250k then any stamp duty due on that would be at 1% so we'd be looking at more like £3.6k overall.
If we bought the property now at £325k the stamp duty wouldn't be much more than the total we're going to have to pay, oh well!!
Many thanks
Re: SDLT on Staircasing
Posted: Tue Sep 11, 2018 6:05 pm
by elliel85
Here is my SDLT calculation, no doubt someone will correct me if I am wrong.
Total amount paid is £122,500 and £162,500 for two linked transactions. That is £285,000.
Because the lease was granted in 2004, before 12 March 2008, you do have to revisit the 2004 return as a result of the staircasing. The total consideration is now £285,000. We need to look back to the slab rates of SDLT due in 2004. At the time the rates for transactions between £250K and £500K was 3%. You already have paid 1% of £122,500. You will now need to pay the remaining 2% of £122,500 which is £2,450.
You also need to pay SDLT on the £162,500 now paid. To work this out you start by working out what the SDLT would be now on the total of £285,000. We use current rates of SDLT, so assuming that the higher rates of SDLT do not apply (this is your only property?) the SDLT on £285,000 would have been £4,250 (calculated in slices at 0% at 2% and at 5%).
You only pay a proportion of this £4,250 though. The proportion is 162,500 / 285,000. That works out as £2,423.
So the total SDLT due as result of staircasing is £2,450 + £2,423 = £4,873.
You will find some HMRC guidance here: https://www.gov.uk/guidance/sdlt-shared-ownership-property and also in the HMRC SDLT Manual.
Hi sorry to jump in on this post but Are you able to confirm - we bought our property in 2015 so if we wish to stair case from 35% to 100% now, does our initial transaction count as a consideration or is it exempt? thank you