SDLT - cohabiting couple separating - 2 properties

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    SDLT - cohabiting couple separating - 2 properties

    My ex-partner & I own two properties, one is our main home and the other is a buy-to-let. We own both properties jointly and have a joint mortgage on both.

    The plan is for me to take on ownership of and the mortgage for the buy-to-let property and to move into it as my main home. My ex-partner will take on ownership of and the mortgage for our former main home.

    Our main home is worth more than our buy-to-let property and my ex-partner will make a lump sum payment to compensate me for the difference.

    How do we calculate SDLT on all this?

    #2
    - your SDLT liability is based on the value of half
    of the mortgage outstanding on the BTL
    - your partners SDLT liability is based on the value of half of the mortgage outstanding on your main home, plus the cash lump sum she is paying you.

    She may also have CGT implications on the BTL bear in mind.
    Any posts by myself are my opinion ONLY. They should never be taken as correct or factual without confirmation from a legal professional. All information is given without prejudice or liability.

    Comment


      #3
      It may be possible for your wife to "take on" the mortgage for the main home, but it won't be possible (I would have thought) for the OP to take on the BTL mortgage - the lending rules don't normally allow BTL lending to convert to other lending.

      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


        #4
        MrShed Thanks. Does that mean that this is all regarded as a single transaction for SDLT purposes? In some sense the lump sum payment is the *net* result of a payment by me to my ex for the share in the BTL and a larger payment from my ex to me for the share in the main home. Can you reassure me that these payments are not taxed separately and it is only the net figure that is important? Also is the market value of the properties significant in any way?

        Comment


          #5
          jpkeates Thanks. I will either take out a new non-BTL mortgage on the rental property or pay off the mortgage entirely. Am I correct in assuming that neither of these scenarios will have any effect on the SDLT calculations?

          Comment


            #6
            floehopper,

            No - I'm not sure what in my post made you think that but apologies if it did. SDLT will treat these as two separate transactions. SDLT, unlike CGT or similar, isnt interested a "net" position, its interested in specific transactions.

            I dont believe the market values of the properties are significant for SDLT - they may/will be for CGT.
            Any posts by myself are my opinion ONLY. They should never be taken as correct or factual without confirmation from a legal professional. All information is given without prejudice or liability.

            Comment


              #7
              You & ex-Partner are joint owners of 2 properties and intend to exchange 50% in Main Home for 50% in BTL Property and difference in values will be paid by ex-partner to you.

              You should approach a couple of local law firms which offers both divorce and conveyancing services and ask for their quote for your property exchange situation.

              Comment

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