Extra stamp duty

[popular]

Some 14 years ago my sibling and I purchased a house for the use of our parents who had just returned from overseas. The house was registered in our two names and our parents have lived there rent free. We are both married and live with our partners in our individual homes

With the passage of the years the house has become too much of a burden for our aging parents and we would like to sell it and buy them a more manageable flat. It is appreciated that we will incur significant capital gains tax on the sale of the house.

As we both already own our personal homes it would appear that when we purchase the replacement flat for our parents it will probably be deemed the acquisition of a second property and thereby incur the extra stamp imposed on second homes.

Are there any special provisions or concessions on stamp duty in cases such as this (downsizing allowance or whatever). There is no question of the flat being a buy to let as our parents will live in the flat rent free just as they did in the house.

Any advice on how we might structure this change of property in the most economical way, hopefully avoiding or mitigating the extra stamp duty, would be greatly appreciated.

[bd6759]

Why don't you simply gift the money to your parents so that they can buy their own house?

[sandy2000]

Depends .. if the house bought 14 years ago was on mortgage or whether there is money available to be gifted or not..
If such a gift wasn't an option 14 years ago then it may be less of an option at present.
Gifting to parents now may increase IHT in the future..
If saving Tax is the primary goal then perhaps could look at other options rather than selling as CGT may be much more than SDLT
e.g :
renting existing house out, raising mortgage / or bigger mortgage on it and then buying the flat.
-- Gift funds if necessary to parents (if IHT is not an issue).
-- Buy new flat in one of your own children's name (if possible).
If none of the above are options then, possibly get some hired help for parents - especially if they are ageing - they may not be able to look after the flat either in the future .... it might be cheaper than paying CGT on sale and SDLT on purchase.