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I have been advised by my solicitor, that my wife will be liable for Stamp Duty should I add her name on The Title when I remortgage.
We are remortgaging on a loan of £86250 from a value at £115,000 The settlement figure is £110,000 from the existing lenders.
We have been informed that she could be liable for Stamp Duty of £1650,00. I would be obliged if anyone could clarify this please .?
am doing same at the moment at a much higher value
and yes my wife is liable for stamp duty on the debt / mortgage only.
although there are ways around it. transfer a small percentage etc..
As a general rule transfers between Husband and Wife are tax neutral (i.e. there isn't any) for both CGT and SDLT. However the transfer of a mortgage between husband and wife is subject to SDLT but only where the transfer exceeds the lower limit which in the case of a second property is £40,000. The reason being that on a second home there is no SDLT payable where the value is below £40,000.
Accordingly the thing to do is where the current mortgage is either Nil or less than £80k to make the transfer before the property is remortgaged. That would then result in no SDLT. Alternatively you could (as suggested by inav) transfer the property to your wife as Tenants in Common rather than Joint Tenants and only transfer such proportion of the property as would give her less than £40k of the mortgage which on the figures you have quoted would be a 45% share. The thing to remember is that under Tenants in Common you both physically own part of the property which means that you need make sure the property is covered in your wills.
Lastly under this scenario your wife would have to show 45% of the rental income, costs and mortgage on her tax return.
Amendments in last week's budget should be considered
Director of Tax Peplows Limited
CTA ACA FCCA
Exception where spouses and civil partners purchasing from one another4 After paragraph 9 insert—“Spouses and civil partners purchasing from one another9A (1) A chargeable transaction is not a higher rates transaction for the purposes of paragraph 1 if— (a) there is only one purchaser, (b) there is only one vendor, and © on the effective date of the transaction the two of them are— (i) married to, or civil partners of, each other, and (ii) living together (see paragraph 9(3)).(2) Where— (a) there are two purchasers in relation to a chargeable transaction, and (b) one of them (“P”) is also the vendor in relation to the transaction, P is to be treated for the purposes of sub-paragraph (1) as not being a purchaser.(3) Where— (a) there are two vendors in relation to a chargeable transaction, and (b) one of them (“V”) is also the purchaser in relation to the transaction, V is to be treated for the purposes of sub-paragraph (1) as not being a vendor.”