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SDLT Multiple Purchase or Second dwellings

Father, Daughter, and Son in law buy 2 semi's to help look after dad which is it and how much duty ?

I write regarding an SDLT problem following conflicting advice from the solicitor with a variation of £15000 in the amount payable.

 

A married couple John & Carol have lived in a rented house for over 5 years, they bought a buy to let 3 years ago.

 

Carol's Father Fred has lived in a bungalow owned 50% by himself and 50% by a trust set up when his wife died the trustees are Fred and Carol, Carol is the sole beneficiary.

 

John, Carol and Fred have now bought two adjoining semidetached properties.

John and Carol bought property 1 with a mortgage and a gift from Fred. John and Carol still own the buy to let.

Fred bought property 2 with the trust following the sale of his bungalow.

Each house will be the owners main residence respectively.   

 

Questions

1. Does the buy to let mean John and Carol have to pay the 3% additional Property charge even though the buy to let mortgage does not allow them to live in it and it was purchased before the 2016 changes?

 

2 As Carol owns part of Property 1, and (as trustee and potentially as sole beneficiary) part of property 2 does this make them linked and attract a 3% additional Property charge there also?

 

3 Does the linking make it a multiple purchase attracting only 1% on the total price of 490k or does the buy to let that Carol is part owner of add a further 3% additional Property charge even though the buy to let mortgage does not allow them to live in it and it was purchased before the 2016 changes?

Replies

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19th May 2018 15:18

Some great news for you. No stamp duty at all on the transactions. Hope that helps.

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By alfredy
to Accountant A
19th May 2018 17:29

Thank you for your quick response please explain!!

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to alfredy
19th May 2018 18:49

You'd probably get it were the actual liability an LBTT one.

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By alfredy
to Tax Dragon
20th May 2018 14:08

Thank you.
As this is in England stamp duty is a concern if someone could explain I woiuld be grateful thank you

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to alfredy
20th May 2018 16:13

As already mentioned, there will be no stamp duty, assuming this all happened within the last 15 years.

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to Tim Vane
20th May 2018 17:12

The OP, a member of the cosy Aweb community for three happy years, clearly has not looked at any of the many threads about Stamp Duty.

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By alfredy
to Tax Dragon
20th May 2018 21:43

now that stamp duty has been corrected to SDLT could I have some answers please.

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to alfredy
21st May 2018 01:10

Hey, respondents in here are accountants and such. We don't get out much. OPs are supposed to be accountants and such, but clearly generally aren't. Don't bite at the hand you are not feeding (if I may completely knacker a metaphor).

When you said that a solicitor had given conflicting advice, how did that work? The solicitor said the tax was both due and not due - or... what?

Also, please clarify re the trust. Is dad really not a beneficiary?

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By alfredy
21st May 2018 09:09

thank you for responding, my apologies for biting oops.
The Solicitor changed her mind four times with different amounts due varying from £5k to £20k.
I understand dad has a life interest in the trust

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to alfredy
21st May 2018 10:37

The SDLT position depends on the answer to the trust question, and you have changed your mind on that. Maybe that's why you got conflicting advice from the solicitor too?

If dad has a life interest (don't just "understand" that to be the case - take advice to find out) then the answers are:

1) yes
2) no
3) N/A

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to alfredy
21st May 2018 11:06

Incidentally, I noted the tense in your OP vis-à-vis the purchase (past). Please note that in mine vis-à-vis the trust (present): "has" a life interest. If the sale terminated the IIP (not unusual), then my answers are as wrong as your OP.

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By alfredy
to Tax Dragon
24th May 2018 22:13

Thank you, dad has a life interest so at cost of £299,950 for property 1 gives SDLT of £13996 and £200,000 for property 2 gives SDLT of £1500 is this correct please.
As the same solicitors firm set up the trust bought the bungalow and now is dealing with this as well as conveying the buy to let surly they should not need to be told.

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to alfredy
25th May 2018 06:41

What's happening here? The purchases have been made. Why is the solicitor not dealing with the SDLT? Why hasn't she already dealt with it? - in my experience it normally happens same day as the purchase.

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By alfredy
to Tax Dragon
25th May 2018 21:12

Just checking as it keeps changing

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to alfredy
26th May 2018 08:36

alfredy wrote:

Just checking as it keeps changing


How much tax was paid?
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