will this be caught by the SDLT 3% higher rate

if house in the child's name?

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parents buy a house. the mortgage will be in all the parents' and adult child's names but the legal title in the child's name. The child will live in the house as his PPR. The parents alrewady own a home. The child does not own any properties.  Will this be caught by the higher 3% SLT rate on addiotnal residentail properties? thanks. 

Replies (13)

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By cathygrimmer
22nd Mar 2017 10:50

I very much doubt you will get a mortgage in the parents' name if they aren't owners so there probably will be additional SDLT payable.

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Replying to cathygrimmer:
By forrest gump
22nd Mar 2017 11:32

what if there is though?

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Replying to forrest gump:
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By cathygrimmer
22nd Mar 2017 11:45

What if there is what? Sorry - I don't understand what you're asking! Can you clarify.

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Replying to cathygrimmer:
By forrest gump
22nd Mar 2017 11:47

sorry, i meant if there are lenders who are prepared to lend to the parents and have only child in the ownership title? what is the law saying about the SDLT 3%?

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By Cathy R
22nd Mar 2017 11:44

I think not, take a look at example 19 on page 36 of this
https://www.gov.uk/government/uploads/system/uploads/attachment_data/fil...

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By Cathy R
22nd Mar 2017 11:49

https://www.gov.uk/government/uploads/system/uploads/attachment_data/fil...
it doesn't seem to be posting the full address!

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By Justin Bryant
22nd Mar 2017 11:51

Ignoring the above mortgage issue, something is the wrong way round here, as a minor cannot have legal title to UK land. The simple solution is for the parents to have legal title & hold on bare trust for the child, but that only avoids the 3% SDLT surcharge with children >18 years old (assuming they have no other dwelling major interest).

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Replying to Justin Bryant:
By forrest gump
22nd Mar 2017 11:53

the child is not a minor. i should have clarified that.

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By Dick Stastey
22nd Mar 2017 12:07

Personally, I thought that referring to the child as an adult child was perfectly clear.

I would be astounded if the lender allowed the property to be registered in the child's name whilst the loan (presumably secured on the property) is in the parent's name.

However, it is not the legal ownership (who's registered at land registry), but the beneficial ownership that matters. If the parents have a beneficial interest in the property the higher rates apply.

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Replying to Dick Stastey:
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By Justin Bryant
22nd Mar 2017 12:52

A minor error.

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Replying to Justin Bryant:
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By Dick Stastey
22nd Mar 2017 13:14

Indeed. Just a toddler. I mean tiddler.

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By Cathy R
22nd Mar 2017 12:09

For some reason the whole link is not copying, if you look at: 'Guidance Note - Stamp Duty Land Tax: higher rates for purchases of additional properties' on the HMRC website, I think that this issue is addressed in Example 19.

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