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Where Taxpayers and Advisers Meet

Changing ownership proportion with spouse as tenants in common

anders35
Posts:8
Joined:Tue Sep 25, 2018 7:24 pm
Changing ownership proportion with spouse as tenants in common

Postby anders35 » Mon Sep 28, 2020 3:10 pm

Hi,

I own a BTL property with my spouse as tenants in common. We are both on the mortgage which amounts to 360k. The declaration of trust our solicitor created after we bought it set our proportions to 50% each. Now, we would like to change this to 5% and 95%. We have created a new declaration of trust showing the new split and have prepared form 17 to send to HMRC. Given that the proportions are changing, do we need to create a SDLT report? As per the new declaration of trust, my wife is taking on 45% more ownership of the property. Does that mean that we need to create a SDLT report of 45% of the outstanding mortgage amount (162k)? As this is not our main home, that would mean a SDLT bill of 3% of this amount.

From the HMRC web site, it seems pretty clear that there is no SDLT due:

If the larger share is given outright as a gift
If you take a bigger share but don’t pay anything in return, there’s no ‘consideration’ given including taking on liability for a mortgage. You won’t pay SDLT, even if the value of the extra part of the share is more than the SDLT threshold. You don’t need to tell HMRC about the transaction.

However, I have read a lot of conflicting info on the above so would be great to get some clarification.

Many thanks in advance!

someone
Posts:692
Joined:Mon Feb 13, 2017 10:09 am

Re: Changing ownership proportion with spouse as tenants in common

Postby someone » Mon Sep 28, 2020 3:20 pm

The 3% surcharge is not in scope for transfers between H&W.

So assuming this was done under the current SDLT thresholds there is no SDLT due.

AdamS93
Posts:268
Joined:Tue Sep 26, 2017 6:28 pm

Re: Changing ownership proportion with spouse as tenants in common

Postby AdamS93 » Tue Sep 29, 2020 3:41 pm

The 3% surcharge is not in scope for transfers between H&W.

So assuming this was done under the current SDLT thresholds there is no SDLT due.
I disagree. As there is a mortgage, there is 'consideration' and thus SDLT is payable on transfer as this amount exceeds £40k.

AGoodman
Posts:1738
Joined:Fri May 16, 2014 3:47 pm

Re: Changing ownership proportion with spouse as tenants in common

Postby AGoodman » Tue Sep 29, 2020 4:15 pm

No, the 3% surcharge does not apply. There is a specific exemption for transfers between spouses.

That means the threshold is the usual one - £500,000 now or £125,000 from 1/4/21

maths
Posts:8507
Joined:Wed Aug 06, 2008 3:25 pm

Re: Changing ownership proportion with spouse as tenants in common

Postby maths » Tue Sep 29, 2020 4:40 pm

No 3% [FA 2003 Sch 4ZA para 9A].


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