Stamp Duty joint ownership

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    Stamp Duty joint ownership

    I am considering splitting up from my wife ( but not divorcing )
    I already own a portfolio of buy to lets

    I am considering buying a new property in joint names with my daughter ( 50% each ) who does not own a property
    I will be the only person living in the property
    The property cost is £100k and I will be providing most of the funding
    What stamp duty is payable 3% of £100k or 3% of £50k ?


    If I decide to sell the property say in 2 years time
    Assume a £120k sale price

    Can the gain be split equally between us and so use up our CGT allowance of circa £10k each and therefore neither of us pay any CGT ?

    The proceeds of the sale £120k could this be transferred to either party or has £60k got to go to both myself and £60k to my daughter ?
    Could my daughter transfer money back to myself in recognition of the original funding ?

    #2
    1. If you buy a property under joint names and you already own a property, the entire property purchase will be liable for 3% SDLT . The SDLT threshhold for 3% starts at £40K, so your purchase will be charged at £100K-40K = £60K at 3%.

    2. Owner occupiers are exempt for capital gains tax. If you plan to sell in 2 years time, what is the point of buying under joint names ?

    3. Conveyancing solicitors are bound by law society rules which probably require the sale proceeds to be split and paid to each party's bank account. You should consult with conveyancing solicitor how to record your original loan to daughter so that after sale the loan money is returned to you.

    Comment


      #3
      Originally posted by Gordon999 View Post
      1. If you buy a property under joint names and you already own a property, the entire property purchase will be liable for 3% SDLT . The SDLT threshhold for 3% starts at £40K, so your purchase will be charged at £100K-40K = £60K at 3%.
      Not quite. The £40k is a floor, but the 3% is on the whole amount so it would be 3% of £100k - no returns at all are due on properties selling for less than £40k

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