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Where Taxpayers and Advisers Meet

Do I have to pay higher rate tax?

Jorido88
Posts: 3
Joined: Sat Jul 13, 2019 12:21 pm

Do I have to pay higher rate tax?

Postby Jorido88 » Sat Jul 13, 2019 12:37 pm

Hi everyone :D

I got married quite recently. I owned flat A prior to getting married. My wife owned flat B prior to getting married.

Flat A is worth 320k, outstanding mortgage is 100k

Flat B is also worth 320k, outstanding mortgage is 75k

We have a baby on the way and want to buy family house C, with a budget of around 550k. We would ideally want to sell flat A, but not flat B to raise a deposit, but are unsure of the stamp duty situation. My questions are thus:

a) Can we avoid paying the higher rate of stamp duty if we sell flat A (currently in my name only), and get a mortgage with my name only on Family House C;

b) Can we put my wife’s name on flat A, then sell flat A, then buy family house C without paying higher rate stamp duty (presumably it could be in both our names then)

c) If the answer to a) and b) is no, are there any other options available to us (if it helps, I own around 80k, she earns around 55k, and we have about 50k cash available)

Many thanks
Joe

Jorido88
Posts: 3
Joined: Sat Jul 13, 2019 12:21 pm

Re: Do I have to pay higher rate tax?

Postby Jorido88 » Sat Jul 13, 2019 5:42 pm

If it helps we could move flat b to ownership to a limited company

bd6759
Posts: 3109
Joined: Sat Feb 01, 2014 3:26 pm

Re: Do I have to pay higher rate tax?

Postby bd6759 » Sat Jul 13, 2019 5:56 pm

In which property do you live now, and where have you lived over the last 3 years?

SDLT Geek
Posts: 174
Joined: Sun Apr 30, 2017 5:45 pm

Re: Do I have to pay higher rate tax?

Postby SDLT Geek » Sat Jul 13, 2019 6:16 pm

As bd6759 says, we would need to know which properties each of you has lived in as your only or main residence to answer your main question.

Addressing your follow up question: if flat A is first sold and flat B is transferred to a limited company before you buy house C, then the higher rates will not be due on the purchase of house C. But the higher rates would be due on the company on taking flat B. If the market value is £320K then this would be SDLT of £15,600.

Jorido88
Posts: 3
Joined: Sat Jul 13, 2019 12:21 pm

Re: Do I have to pay higher rate tax?

Postby Jorido88 » Mon Jul 15, 2019 9:53 am

I’ve lived in both flat A and flat B - she has only lived in flat B

SDLT Geek
Posts: 174
Joined: Sun Apr 30, 2017 5:45 pm

Re: Do I have to pay higher rate tax?

Postby SDLT Geek » Mon Jul 15, 2019 10:36 pm

As your wife has not lived in Flat A, then you selling that one, but her keeping flat B when house C is bought, will mean the higher rates are due on house C.


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