News0 min ago
Stamp Duty
Hi...my husband has inherited a house..we need to knock it down and rebuild it..the land is worth 100,000, we have been told we have to pay 1250 stamp duty??
Answers
>>> from what i can see, you have to pay 3% on anything over 40k for a second home Not exactly. If a second home is worth less than £40k you pay nothing but if it's worth over £40k (up to £125k) you pay 3% of the whole value (including the first £40k). >>> Is it because i am not on the deeds as an owner? It's likely to be exactly the opposite. i.e. for you and your husband to...
16:12 Fri 05th Jun 2020
I'm saying that the inheritance part of the situation is dead and gone.
Mr P now owns a property that he wants to take out a mortgage on, in order to develop the site. (It's entirely irrelevant as to how he came by the property. The situation would be the same if he'd owned it for years, rather than having recently inherited it). However he's unwilling, or unable, to take on the mortgage on his own. He therefore propses that Mrs P should take on the mortgage jointly with him but the lender won't allow that to happen unless Mrs P becomes the co-owner of the property. He therefore gifts half of the property to Mrs P. Despite there being no consideration, HMRC still see Mrs P's acquisition as having a chargeable value upon which SDLT must be paid.
Mr P now owns a property that he wants to take out a mortgage on, in order to develop the site. (It's entirely irrelevant as to how he came by the property. The situation would be the same if he'd owned it for years, rather than having recently inherited it). However he's unwilling, or unable, to take on the mortgage on his own. He therefore propses that Mrs P should take on the mortgage jointly with him but the lender won't allow that to happen unless Mrs P becomes the co-owner of the property. He therefore gifts half of the property to Mrs P. Despite there being no consideration, HMRC still see Mrs P's acquisition as having a chargeable value upon which SDLT must be paid.
I dont know anything about how SDLT works on a mortgage of an existing property. But it strikes me that if you are within 2 years of death of the deceased, you do a Deed of Variation so instead of leaving the property to your husband, it is left between you and the husband.
In my view, you might want to take some advice on this.
In my view, you might want to take some advice on this.
I'd been thinking, Barmaid, that it was unfortunate that the property wasn't left jointly to Mr & Mrs P, as that would clearly have avoided the SDLT problem created by the need to transfer half the title, but I'd forgotten about deeds of variation.
Your suggested solution would seem to have considerable merit in it to me.
Your suggested solution would seem to have considerable merit in it to me.
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