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Where Taxpayers and Advisers Meet

Buying a share and sdlt

Bill31
Posts:50
Joined:Sun Jan 19, 2020 12:32 am
Buying a share and sdlt

Postby Bill31 » Thu Feb 04, 2021 10:19 am

I live at home with father who gifted me a share in the property for no consideration a few years back. There was no cgt as its always been our main residence. No sdlt was paid as there's no mortgage and it was a true gift.
We are both tenants in common. Can I buy my father's share out as he's going to live with his new woman.
How would I do this, do I need to instruct a surveyor to get market valuation? And would there be sdlt to pay.??

Current price of house is 550k. Are there any other implications I need to be aware of such as iht or poat in buying this half share so the house is fully in my name?

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

Re: Buying a share and sdlt

Postby AGoodman » Thu Feb 04, 2021 12:55 pm

Yes you can buy.

You don't need a surveyor if you can agree a price without one. If it's a significant value, it's useful to know that it's the right price but if you're paying him say £250k and appears to be market value or thereabouts, its unlikely to be worth it for purely IHT reasons. The only consequence is if you pay him under market value then the difference is a gift (which would only be an issue if he died within 7 years).

Yes, there could be SDLT depending on the sum you are paying him (this is the sole criteria assuming you don't have another property). You can plug the number into the HMRC sdlt calculator.

No other obvious IHT or POAT issues. You'd need to look into it if he moved back in.

Bill31
Posts:50
Joined:Sun Jan 19, 2020 12:32 am

Re: Buying a share and sdlt

Postby Bill31 » Thu Feb 04, 2021 1:51 pm

Thanks ag.
Is it true that the quantum of father's original gift of half the house to me would have been the total value of the house at the time, less the value of his retained half. For the reasons outlined in the link this is not half the total value of the property.
https://sfe.legal/when-is-a-half-not-a-half-the-problems-of-valuing-a-share-in-a-property/

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

Re: Buying a share and sdlt

Postby AGoodman » Fri Feb 05, 2021 12:21 pm

Yes because the "transfer of value" for IHT is not the value of the gift, its the sum by which the donor's estate is reduced. i.e. you look at the value of their total assets before and after the gift.


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