This site uses cookies. By continuing to browse the site you are agreeing to our use of cookies. To find out more about cookies on this website and how to delete cookies, see our Cookie Policy.
Analytics

Tools which collect anonymous data to enable us to see how visitors use our site and how it performs. We use this to improve our products, services and user experience.

Essential

Tools that enable essential services and functionality, including identity verification, service continuity and site security.

Where Taxpayers and Advisers Meet

Stamp duty implication when Father and son buying property

samboston
Posts:21
Joined:Wed Aug 06, 2008 3:47 pm
Stamp duty implication when Father and son buying property

Postby samboston » Tue Apr 13, 2021 2:57 pm

Hello

My son and I wish to buy a house to live in as our main residence.

My son has never owned a property, so is a first time buyer.

I don't own any property at the moment. Over 10 years ago I did owned a property with my wife (50/50%). However, about 10 years ago my name was removed from the property and only my wife's name remains on that property. We all currently live at this property.

Once my son and I have purchased our house, my wife would not be living with us, and will remain in her current house and she does not own any other property.

Does this mean that I do NOT have to have stamp duty and that I am effectively a first time buyer?
Price of property is approximately £380K

Thanks

maths
Posts:8284
Joined:Wed Aug 06, 2008 3:25 pm

Re: Stamp duty implication when Father and son buying property

Postby maths » Tue Apr 13, 2021 3:07 pm

Both purchasers need to qualify as first time buyers; as you previously held an interest in a dwelling then the purchase transaction by you and your son will not qualify for first time buyer relief.

maths
Posts:8284
Joined:Wed Aug 06, 2008 3:25 pm

Re: Stamp duty implication when Father and son buying property

Postby maths » Tue Apr 13, 2021 3:12 pm

Bit missing from my post; due to SDLT holiday relief, no SDLT is chargeable on the £380k assuming "completion" by 30 June this year.

samboston
Posts:21
Joined:Wed Aug 06, 2008 3:47 pm

Re: Stamp duty implication when Father and son buying property

Postby samboston » Tue Apr 13, 2021 3:45 pm

Thanks for the reply.

1) How much would the stamp duty be if we miss the 30-June-2021 deadline, under current rules.

2) As my wife and I are still married, would this imply that I still have an interest in her property for stamp duty purposes, even thou my name was removed from her property about 10 years ago?
That is, would my purchase with my son be treated as if I am buying a 2nd home, and is so the stamp duty implications of that.

Thanks

maths
Posts:8284
Joined:Wed Aug 06, 2008 3:25 pm

Re: Stamp duty implication when Father and son buying property

Postby maths » Tue Apr 13, 2021 4:38 pm

Completion after 30 June but on or before 30 September 2021: 5% x [£380k - £250k] ie £6,500.

After 30 September: [2% x [£250K - £125k]] + [5% x [£380k - £250k]] ie £9,000.

The issue as to whether the extra 3% charge applies on the purchase depends upon whether, although you are not on the legal title together with your wife, you still have a beneficial interest in that property.

samboston
Posts:21
Joined:Wed Aug 06, 2008 3:47 pm

Re: Stamp duty implication when Father and son buying property

Postby samboston » Tue Apr 13, 2021 4:50 pm

"you still have a beneficial interest in that property."

Who, how or what determines whether I have a "beneficial" interest or not?

Thanks

maths
Posts:8284
Joined:Wed Aug 06, 2008 3:25 pm

Re: Stamp duty implication when Father and son buying property

Postby maths » Tue Apr 13, 2021 5:22 pm

You say: "about 10 years ago my name was removed from the property and only my wife's name remains on that property".

Your name being removed from the property I assume means only your wife is shown on the LEGAL title to the property. When this was done, normally a Form TR1 would be lodged with Land Registry removing your name leaving only her name. This suggests that you do not now have a BENEFICIAL interest in the property. However, this depends upon what you and wife agreed at the time in this regard.

samboston
Posts:21
Joined:Wed Aug 06, 2008 3:47 pm

Re: Stamp duty implication when Father and son buying property

Postby samboston » Tue Apr 13, 2021 10:50 pm

"However, this depends upon what you and wife agreed at the time in this regard."

It was done via solicitors, and she paid me for my 1/2 share of it. And in return I said (signed) that I would not have any rights to her house.

maths
Posts:8284
Joined:Wed Aug 06, 2008 3:25 pm

Re: Stamp duty implication when Father and son buying property

Postby maths » Wed Apr 14, 2021 6:38 pm

Based on your last post, it seems you do not have a beneficial interest in the property you originally owned with your wife.

The 3% surcharge shouldn't apply.

SDLT Geek
Posts:230
Joined:Sun Apr 30, 2017 5:45 pm

Re: Stamp duty implication when Father and son buying property

Postby SDLT Geek » Thu Apr 15, 2021 8:38 pm

I agree with maths, subject to one point. This is that the 3% not applying depends on you and your wife being “separated in circumstances likely to be permanent”.

If you are still together, then the fact that she owns a property, would make the 3% surcharge apply to the purchase.


Return to “Stamp Duty, Stamp Duty Land Tax, SDLT”

cron