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Where Taxpayers and Advisers Meet

Transfer of equity - Stamp Duty queries (urgent!)

KCSunshine
Posts:2
Joined:Fri Nov 20, 2020 11:02 am
Transfer of equity - Stamp Duty queries (urgent!)

Postby KCSunshine » Fri Nov 20, 2020 11:41 am

Hello,

I live in the North of England and own a freehold detached property. It had a purchase price of £349,000 and is in the name of me, my wife and my mother as 'Joint Tenants'. The current valuation of the property is approximately £400,000. The outstanding mortgage on the property is £82,000 which is under all our names. The joint mortgage taken out was just based on my sole income. My wife and mother have no income.

My mother is contemplating moving out of the U.K. permanently and hence wants to be taken off the mortgage and the title deeds. There are no exchange of monies. Me and my wife will be taking on the outstanding mortgage.

Can someone please help me with the following queries;

1. Is transfer of equity classed as a purchase/sale?

2. What is the total chargeable consideration in this scenario? Is it £27,333.33, i.e. £82,000/3 as me and my wife are just taking on the share of my mother's mortgage or is it £82,000?

3. Is any SDLT due allowing for the current or pre-pandemic thresholds?

4. Will SDLT require filing with HMRC in this scenario?

I will be very grateful if anyone can answer these questions.

Kind Regards,

KCSunshine

AGoodman
Posts:1109
Joined:Fri May 16, 2014 3:47 pm

Re: Transfer of equity - Stamp Duty queries (urgent!)

Postby AGoodman » Fri Nov 20, 2020 4:27 pm

1. Yes
2. £27k
3. No
4. No "You don’t need to pay SDLT or tell HMRC about freehold land and property transactions with a total chargeable consideration of less than £40,000, unless the total chargeable consideration includes any linked transactions." https://www.gov.uk/guidance/stamp-duty-land-tax-transactions-that-dont-need-a-return

KCSunshine
Posts:2
Joined:Fri Nov 20, 2020 11:02 am

Re: Transfer of equity - Stamp Duty queries (urgent!)

Postby KCSunshine » Fri Nov 20, 2020 4:50 pm

1. Yes
2. £27k
3. No
4. No "You don’t need to pay SDLT or tell HMRC about freehold land and property transactions with a total chargeable consideration of less than £40,000, unless the total chargeable consideration includes any linked transactions." https://www.gov.uk/guidance/stamp-duty-land-tax-transactions-that-dont-need-a-return
Thanks AGoodman. None of us hold own any properties and this is the only transaction taking place. Am I right in saying that is not a linked transaction?

maths
Posts:8037
Joined:Wed Aug 06, 2008 3:25 pm

Re: Transfer of equity - Stamp Duty queries (urgent!)

Postby maths » Sun Nov 22, 2020 3:18 pm

Yes.

Presumably the three of you each have a beneficial interest in the property ie you didn't simply agree to help obtain the mortgage but not taking a beneficial interest your self?

Legal title is always held as joint tenants but beneficial interests can be held as joint tenants or tenants in common.

Assuming mother has a beneficial interest then she will make a disposal for CGT when she disposes of her interest although assuming a one third interest should be relatively small (no CGT if the property is her family home in which she lives).


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