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Where Taxpayers and Advisers Meet

Shared ownership staircasing

tbo2021
Posts:2
Joined:Wed Jan 13, 2021 9:11 pm
Shared ownership staircasing

Postby tbo2021 » Wed Jan 13, 2021 9:25 pm

Hi all,

looking for some help on a shared ownership staircasing question and I'd really appreciate your advice.

I bought a 50% share of a property in 2018 as a first-time buyer for £180k and elected to pay SDLT in stages.

The property is now worth £375k full price and I'd like to purchase the remaining 50% share for £187,500.
The purchase will be happening after April so when we're back to normal rates.

I'm confused by the gov uk guidance. Do I pay SDLT on the whole 375 or just on the 187.5?

Thanks in advance!

T

SDLT Geek
Posts:232
Joined:Sun Apr 30, 2017 5:45 pm

Re: Shared ownership staircasing

Postby SDLT Geek » Sat Jan 16, 2021 5:00 pm

You pay SDLT on the £187,500, but at rates of tax allowing for linked transactions.

So SDLT would be worked out first on £367,500 (the £180,000 + £187,500 paid). The rates structure would be that in force at the time of staircasing.

The actual SDLT payable would be a fraction of the SDLT so calculated. The fraction here is £187,500 / £367,500.

tbo2021
Posts:2
Joined:Wed Jan 13, 2021 9:11 pm

Re: Shared ownership staircasing

Postby tbo2021 » Sun Jan 17, 2021 4:21 pm

OK great, thanks for clarifying.

GrahamDuffield
Posts:1
Joined:Wed Jan 05, 2022 9:59 am

Re: Shared ownership staircasing

Postby GrahamDuffield » Wed Jan 05, 2022 10:10 am

Could I possibly piggy back on this thread with another example for my circumstances just to check my understanding?!

My partner purchased her 50% of a £150,000 property (so £75,000) back in May 2004.
I am now looking to move in with her and jointly purchase the other 50% with her and the freehold. The house value is now at £280,000 so we need to purchase the other £140,000.
To complicate things, I am renting out my property so am subject to an additional 3% of SDLT at each rate.

If I understand correctly, the tax we will have to pay is therefore:

Final Transaction: £140,000
1st Transaction: £75,000
Total to pay SDLT on: £215,000

Calculated based on
(0% + 3%) = 3% of £125,000 = £3,750
(2% + 3%) = 5% of £90,000 = £4,500
Total SDLT payable is therefore = £8,250

Apportioned to the final transaction as a ratio of £140,000 / £215,000 = 65.11%
Therefore total payable in SDLT is 65.11% of £8,250 = £5,372

Is that correct ????

Thanks in advance!


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