how to work out stamp duty if I transfer my flat to wife?

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    how to work out stamp duty if I transfer my flat to wife?

    Hi,
    My wife and I have a small flat which is let out at the moment. Say the flat is worth 100k and the mortgage on the flat is 50k.
    If I would like to transfer the flat to her (so she owns 100%), do we need to pay any stamp duty?
    I googled this and getting confused on how to work out the stamp duty to pay.

    this is my calculation
    (100 -50) /2 = 25k.
    This is the debt consideration.
    As it is less than 40k, we won't need to pay any stamp duty.
    Is my understanding correct?

    Many Thanks

    #2
    Who owns the flat at the moment?
    In who's name is the mortgage?
    And why do you want to transfer it into your wife's name?
    When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
    Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

    Comment


      #3
      hi,
      Both of us owns the flat and both names are on the mortgage. I am on high rate and she is on the standard rate.

      I am thinking of solving the tax problem once for all (as I will pay more tax for the rental income). I know that I could setup a trust, but I don't think my wife will ever go for anyone else, so I have no problem just giving her the whole thing.

      Her income should be enough to make the bank happy as the mortgage fairly low.

      Comment


        #4
        The lender won't allow you to transfer all of the title to your wife (I'd guess) as you'd have no security for the mortgage.
        So your wife would need to take out her own mortgage.

        And if she dies (rather than leaving you) that might be more complicated.

        That's often why a trust is useful - it's just simpler overall and more flexible.
        When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
        Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

        Comment


          #5
          hi,

          many thanks for your reply.

          I am not sure I understand this " as you'd have no security for the mortgage.". The flat is still there and my wife has income as well. Does that not count as security?

          I understand about the "Die" part, but if we go for a trust (say I own 1% and she owns 99%), won't it be very similar to she owns 100% anyway?

          thanks again

          Comment


            #6
            I would say your sums are possibly correct as you will be giving her 25k of your debt, however I think if she owns another property such as a share in the matrimonial home then she will have to pay the 3% surcharge.

            Comment


              #7
              Originally posted by daxu View Post
              I am not sure I understand this " as you'd have no security for the mortgage.". The flat is still there and my wife has income as well. Does that not count as security?

              I understand about the "Die" part, but if we go for a trust (say I own 1% and she owns 99%), won't it be very similar to she owns 100% anyway
              You would be liable for the whole mortgage (as a joint mortgage holder) and nothing would guarantee your loan.
              The lender is unlikely to allow the change - you could always ask them.
              The risk is remote, as the lender will have a charge on the property and wouldn't allow a change of ownership, but won't want to get involved in the mess were you to divorce or your wife die and leave the property to someone else.
              I'd just expect them to say no because there's no upside to them.

              If the title and the mortgage were both in your wife's name, all would be well (assuming she could get the lender to agree the loan).

              The trust would be a change in beneficial ownership, not the title ownership, but the lender might allow that (as it's reasonably common).
              The beauty of a trust is that you can simply rip it up at any point (as you would be all of the trustees and all of the beneficiaries).
              So you'd end the trust before you sold the property so you'd have two lots of CGT allowance.

              Talk to an accountant or family solicitor - please don't take my word for it.
              You need someone who knows all of your circumstances.
              If you have children, an actual trust might beneficial for Inheritance tax purposes.
              When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
              Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

              Comment


                #8
                Stamp duty was discontinued over 5 years ago and the fee is now called "sdlt" . If you google "stamp duty" , you may not find the latest info.

                If you sell your half share to wife the consideration is 50K. ( 50% of the market value )

                If you gift your half share to wife , the consideration is 25K ( 50% of outstanding mortgage ).

                If you can persuade the mortgage lender to accept your wife as the sole borrower , then you must get a conveyancing solicitor to quote for gifting of your half share to wife.

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