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  1. Wondering if anyone can help with a sdlt surcharge related question. If you own your own home and are then gifted a second property by your parents I'm aware there is no stamp duty to pay as there is no chargeable consideration. If you then wait for 6 months (as is typically required) and then take out a buy-to-let mortgage on that second home (which has been gifted) do you then have to pay the 3% sdlt surcharge on the properties value? Thanks in advance.
  2. Hi! I own a BTL portfolio and I wish to gift a share with no money changing hands to my partner (we're currently unmarried) by a declaration of trust. The share of each individual property's mortgage consideration is less than £40k. I understand that this would not create any SDLT for her (but keen to hear that is correct). However, I'm unclear if this would be regarded as a 'linked transaction'. I have read that linked transactions are relevant for the simultaneous purchase of several properties from the same vendor, and could be treated as if they were all a single purchase (and hence attract SDLT). Does anybody know if this is the case? This seems clear for a case where it's being purchased but I am gifting it. Thanks!
  3. Hi! If I buy a BTL as a first time buyer (of any property ever) and then I later purchase a home for me to live in (without selling the buy to let), will I be liable for the higher rate of SDLT? The reason I ask is I have read that you avoid the higher rate of SDLT on your home if it's your main residence and is replacing a former main residence sold within the previous three years. Obviously in my scenario, I would not be replacing a former main residence as I don't have one to replace! I do have reasons for buying the BTL first. Does anybody know? Any signposting on where there is written guidance would be very appreciated also. Thanks!
  4. Hi all, I'm looking for expert tax advice, wondering if anyone could direct me to a specialist BTL tax accountant. My situation is: I am a property owner (BTL property which I own outright, is not and never has been my main residence). My partner is not a home owner. We are looking to purchase a house (725k) and have been advised that we would not be liable to pay 3% surcharge if my partner's name was the only one on the title document, with a joint borrower sole proprietor mortgage, then to arrange a declaration of trust to protect my deposit and stake in the eventual sale. I want to make sure it is all above board, and that there would be no potential penalty later on.
  5. Hello, I am wondering if the sourcing fees (and additional mortgage lender fees, mortgage broker fees, solicitor cost etc...) spent during the acquisition of a property can be deducted from the CGT bill when the same property is being sold? I am aware of SDLT being deductible but not sure about the lender/broker/solicitor/property sourcing fees. Thank you in advance for the advise. Regards Antoine
  6. Hi My wife and I are looking to convert the house we live in and own to a rental property (our first one) and move into somewhere bigger as we are starting a family. Is additional 3% stamp duty due on the new house we are buying? Is there anyway I could sign full ownership of our current house to the wife and I buy the new one in my name so we are not considered to have 2 houses and thus liable for the extra tax? Is it possible to pay the extra tax if we have to on the value of the smaller cheaper house we currently own instead of the more expensive new one? Just looking at ways not to shell out an additional £12K with our first baby on the way and the wife reducing her hours at work. Any advice would be much appreciated! James
  7. Hi, I currently own and live in my own property (main residence) however I would like to use some saving to purchase another property to then rent out to my brother. Is there a way of doing this without incurring the additional 3% SDLT charges? Thanks!
  8. Hi all, I hope someone would be able to provide their opinion on my condition as I have asked a few accountants and solicitors and have got conflicting answer. Situation: I exchanged before the 3% SDLT was enforced. I am going to complete soon but the developer introduce a new deed of variation. Question: Will accepting this new deed of variation sudject me to the 3% SDLT? Thanks. Brax
  9. I own a rented property in my own name (value £450k) with an outstanding Buy to Let mortgage of just under £80k. I am a 45% tax payer, while my wife is a non-taxpayer so it makes sense to move the rented flat into joint names. My crude understanding is that no SDLT is payable in this situation, as the chargeable consideration is under £40k (being 50% of the outstanding mortgage under a Transfer of Equity) Is this correct? If so, do I need to submit a SDLT declaration to HMRC?
  10. Hi, I’m looking to gift one of my personally owned BTL properties to my wife in order to benefit from her lower tax bracket. I’ve read that property can be gifted by either (1) legal ownership change or (2) beneficial interest change – the main difference between the two that beneficial ownership gives an economic interest in the property (i.e. share in: rent proceeds/ sale proceeds/ tax benefits) but no legal ownership & control. Has anyone gone through this process? Any advice on how difficult/straightforward it is? Cheers
  11. Hello everyone, I’m new to property investing and wanted to get your thoughts and advice on whether what I am thinking of doing in the future is feasible. Current Situation: I bought a flat worth £340k two years ago to live in as a first-time buyer. I incurred ~£10k of SDLT and legal expenses that I deemed capitalised hence a total cost of £350k. The initial two year fixed repayment mortgage of 1.8% is about to lapse and I am currently looking into remortgaging on a two year tracker with no early repayment charge to give me more flexibility The mortgage amount left is ~£200k (LTV<60%) and 28 years I estimate that the property is worth £320k and can achieve a rental value of £1350 (zoopla estimation is lower though) Net rental income is £870 after service charge & ground rent of £130 and £330 of interest expense (based on 2% interest) Aim: I want to let out the property I currently own and buy a second property worth £500k to live in I am planning to finance the purchase by: borrowing £300k on a joint mortgage application with my partner (or perhaps solo) release equity from my existing home fund the remaining balance from own funds Proposed strategy: I understand that with the current regulation any second property purchase is going to incur a 3% SDLT surcharge. Therefore, if I keep my current property I will have to pay £30k rather than £15k in SDLT. To avoid the SDLT surcharge, the solution I came up with is to transfer my current property into a company SPV which would mean that I will not own any property at the time of the second property purchase. I understand that the company will have to pay SDLT of £6k (assuming a £320k valuation) as part of this transfer. I understand that I will need to arrange bridging finance and I will also need to personally guarantee the loan as a director. Questions: Is the transaction that I have outlined above feasible or have I missed any key issues? Any other logistics I need to be aware of? Would the personal director guarantee limit my ability to get a joint mortgage or the extent of borrowing? How much equity would I be able to release from my current property? Any other alternative strategy I can follow to achieve the same result? In addition to saving on SDLT of the second purchase, I understand that I will have further tax benefits such as netting of interest cost against income and getting taxed on corporation tax rate rather than personal income tax rates (higher rate). If I decide to sell my the property, I can sell the SPV rather than the actual property which would mean that the buyer would not have to pay SDLT hence making it a more attractive sale. Is this last point accurate and would it translate to an increased valuation? Thanks for your time and I appreciate any thoughts or advice you may have.
  12. Hi, does anyone have any experience of "Multiple Dwelling relief (FA2003/Schedule 6B)"? I'm assessing whether or not to move the 6 BTL properties that myself and my brother jointly own in personal names into a Ltd Company. One of the major factors in my decision is the amount of SDLT i will need to pay by moving these 6. I have come across the Multiple Dwelling relief (FA2003/Schedule 6B) which states:- "Where 6 or more dwellings are purchased in a single transaction the purchaser can choose whether to apply the non-residential rates of SDLT.” The Ltd Company i set up would in effect be purchasing these 6 properties and if i did this in one or a 'linked' transaction, could i take advantage of this relief? If this was an option to me i would reduce my SDLT liability significantly - my questions is, has anyone done this? had any experience in this? or could offer me any words of wisdom on the subject??
  13. Hi Hubbers, Apologies if this has been asked and answered before (I could find anything in the search option). A potential flip has just come on the market directly opposite my main residence that I own jointly with my partner (we aren't married). >>I'm thinking I could move in across the street whilst the refurb is being undertaken, and make this my primary residence (with my partner continuing to live in our existing house) I'm guessing this would mean that I would: Get CGT relief as the flip is my main residence. Avoid the 3% surcharge on purchase of the property as this is replacing my primary residence. However how would the tax man view the stamp duty we previously paid on our primary residence (i.e. the house me and my partner live in currently)? Would they expect some clawback? Anyone have any other potential pitfalls to what I've described? Thanks hubbers! Jono
  14. Hi Everyone, This is my first post after listening to the podcast for a few years, and unsurprisingly it relates to SDLT. Myself and my wife use to own a London flat (main residence) before we were married, which we sold back in 2016. Since then we've been in rented accommodation. We're now looking into starting our property adventure but would like some advice on the following. Given we sold a primary residence and have not completed the purchase of a replacement main residence before the 26th November 2018, it looks to us we will need to pay the additional 3% SDLT if we buy any property in our names. To us the most tax efficient way forward looks to be to start buying BTL properties into our LTD company, paying the 3% surcharge each time. However when it then comes to buying a main residence in London, which will create a much high SDLT payment, we transfer one of those BTL properties into our individual names, pay the 3% surcharge again and designate it as our primary residence and then sell it back to the company when we purchase our main residence, avoiding the additional 3% surcharge on the new main residence. There should be a break-even point where the additional 3% surcharges incurred moving the BTL property out of and then back into the LTD company are greater than the 3% surcharge on the new main residence. For example on an £800k London flat the 3% surcharge equates to an additional £24k SDLT, so as long as the cost of moving the BTL property around is less than that then it should still be the right economic decision. This would put the break-even value of the BTL flat at £275k, as it incurs £12k SDLT moving the property out of the company and another £12k moving it back in. Any thoughts on whether this is possible, pragmatic and the most tax efficient way of ending up with a new main residence in London and a BTL portfolio in a LTD company would be greatly appreciated. I've also ignored the impact of any CGT tax liability generated in the above scenario and any thoughts on this would be helpful. Sorry for the long post, but wanted to come up with a suggestion to be critiqued rather than just a request for information. Thanks, James
  15. I recently set up an SPV to invest in property and capitalised it with 300k of personal funds. I purchased a London property for 700k and refurbished it (at a personal cost of 150k) with a view to resale. The balance of the property was financed on a commercial loan in the company name which now totals 500k. I personally cover the loan interest by extending the Director Loan account. The property is worth around 1.1m now (would have been more but for the slow-down in London). The total director loan is now around 450k. I would like to transfer A 50% SHARE/PART OF THE PROPERTY BACK TO MY PERSONAL NAME. What is the best way to do this, and are there CGT and SDLT implications on either personal or company side? Regards PJ
  16. Hello all. I wanted to know if anybody could help. We are looking to buy a new house next year but are unsure if we would be liable for the additional 3% Tax. In most cases this is quite straight forward but our situation is a little unusual. - We own a few UK properties and one in China, one of the UK properties we lived in as our main residence up until around a year and a half ago when we let out the property and moved to China. - We are now planning to move back to the UK where we would rent a property in a new area. We then hope to buy in this new area and sell the property that was once our main residence but would have been let out for 2-3 years prior to sale. As such would selling this house we hadn’t lived in for several years count as selling our main residence and exempt us from the additional tax? Many thanks for any assistance. Jason
  17. Hi, Currently, myself and my wife own a property (no mortgage Flat) Worth £125k we are purchasing a new property worth £240k Because my wife is on a spouse Visa we are planning on doing a transfer of equity into my name so that I can get the best LTB mortgage rate, My questions are, please answer you know and not necessarily all of them 1. Do I need to pay any stamp duty when she does a transfer of equity to me? 2. On the new purchase since I'm the sole owner of a flat and she won't hold any property, will we be able to split the additional 3% stamp duty burden i.e 120 @ 3% and 120 @ 0% 3. Once the LTB mortgage has gone through and 2 or 3 years later, if I was to do another transfer of equity once she has the right to remain in the UK will that trigger another SDLT when giving her, her 50% back? (This time with a £93,600 mortgage) Thank you for any help you can offer,
  18. Hi all, Looking for some advice on the question below as I have been on the unfortunate side of being charged 3% on my new residential property price although my converted LTB was priced and remortgaged significantly lower than the new residential. Is it possible for me to convert my current residential property into a BTL and then rent/move in with a friend for a period of 6 months and then buy a new residential mortgage without incurring the 3% ADS on the purchase price on my new residential home and instead, it would be calculated off my BTL at the time of conversion? Thanks for any help/suggestions. Kris
  19. After some collective wisdom please I am currently remortgaging my family home and in discussions with my husband on potentially buying him out. If I were to buy him out and remortgage in my sole name; 1- we paid higher rate SDLT when bought our home (as I already had a BTL previous to the marriage which i previously lived in) - could i request a refund? 2 - would he be liable to pay higher rate of SDLT when he can afford to buy his own home? 3 - he isn't entirely keen on being removed from title deeds because of future potential profit on house - would a deed of transfer work? 4 - currently have an SPV (both directors) which I plan to divy up later, but would this be impacted in any way? Many thanks!!
  20. Hi everyone, My two brothers and I are looking at investing in quite a residential property. We have started a limited company as have been advised this is best for tax purposes for us. One brother already owns a house already. Will this affect the bracket of stamp duty when buying through the company? Any help would be much appreciated. Kind regards Will
  21. I’m transferring a personal BTL to a LTD company, there is no mortgage so the full value of the property, £240k based on a Zoopla desktop valuation, will be added to the company accounts as a directors loan which means I can draw down tax free in future years. i strongly feel my property is over valued by £20-40k and am wondering if it’s worth getting proper evaluations based on the actual state of the property. i question this because although I could save as much as £2k in SDLT by reducing the property value I also wipe around £40k off of potential long term tax-free withdrawals. its possible my logic is flawed so I’d like to get input.
  22. Hello all ... first posting here. I'm looking to start my first property investment for profit and have been looking at suitable properties to purchase, refurb and sell. My personal situation is that I was self employed for the last 12 years doing house refurbs for other people - new kitchens, bathrooms, plastering, tiling etc. Although I have never been out of work, I have struggled to make significant profit but it did give me an income stream and I worked for myself. I am now looking at my pension pot (I am 65) and thinking that I should be investing my time and effort in refurbing my own properties. My pension pot will give me a decent income stream to live month to month, and if I take a tax-free sum out, a decent bit of capital to start my property improvement business. We own our own home with about 95% equity (just a small mortgage left). So my plan is to try and build capital growth on about £100k so that in 5 - 8 years my wife and I can cash-in and buy a really decent place Mortgage free. She has her own income and has 14 years to go before she retires. However ... when I crunch the numbers I find that quick-flipping just doesn't add up. Say £170k invested on a terraced or semi-detached refurb project, with SDLT at £6000, purchased with bridging finance and cash, and with a £10k refurb budget (for say kitchen, bathroom and general improvement), the break-even selling price with loan costs everything factored in is, say, £190k - putting the property at a premium price for the market with not enough 'headroom' to make any real profit. I know you can offset SDLT against CGT but if there isn't any net profit then there isn't any clawback. So what I am saying that a quick flip isn't viable. We are considering either selling our main home and purchasing another to flip and resell, so avoiding the 3% SDLT surcharge, and almost certainly setting up a trading company (either Ltd or SVP) - thereby paying Corporation tax not CGT. So what's the best advice and is there a solution? - our main aim is capital growth so not necessarily interested in BTL. Any views out there? Pete
  23. Would someone mind sharing an Excel formula for the new First Time Buyers SDLT calculation? I'm inexperienced and having problems due to the reversion to standard fee if property is more than £500,000. EDIT: I've figured the formula out and will leave it here in case anyone needs it: =SUM(IF(H15>300000,IF(H15<500000,H15-300000)*5%,0)+IF(H15>500000,IF(H15>125000,IF(H15<250000,H15-125000,125000)*2%,0)+IF(H15>250000,IF(H15<925000,H15-250000,675000)*5%,0)+IF(H15>925000,IF(H15<1500000,H15-925000,575000)*10%,0)+IF(H15>1500000,H15-1500000,0)*12%))
  24. All, I'm looking for some feedback and advice on my proposal to move property into an established property LTD company that I set up in 2013 for student pods. Although I will incur CGT and SDLT obligations I expect to manage that through separate capital losses and remortgaging. I would be withdrawing money from the company but that would be via the Directors Loan account which covers the debt the company owes me. I'm looking to transfer as I'm a higher rate tax payer looking to be more tax efficient by shifting from income tax to corporation tax. I've provided accurate figures where possible but have had to make some assumptions, hopefully its clear which is which. LTD company Set up as a property company late 2013, its current assets are two student pods worth around £110k and debts owed to me of around £90k in the form of a Directors Loan account. The Directors Loan account is used to withdraw money from the company without incurring income tax. No Dividends or salaries have been paid so far. The gross income per year is around £8k, after transferring the properties the gross income will be around £33k. I have a small emergency fund of £2k in the business account which can cover all properties while I build up a larger fund from income. Personal Property I have two properties that I own outright with no mortgages. I lived in both as my main residence before renting and since they went on the market there have been no void periods. The current valuations are based on Zoopla. I've incurred major redecoration and operational expenditure in the last three years which kept my income tax bill down but the properties have no substantial work planned for the next 3 years minimum . Property1 Current value: £240k Current rental income: £11.5k Rental start date: 2012-01 CGT obligation: 5 years SDLT obligation: £9.5K Property2 Current value: £287k Current rental income: £12k Rental start date: 2013-08 CGT obligation: 3 years 6 months SDLT obligation: £13k CGT Obligation this is my personal responsibility but I have a CGT loss of £120k that I'm carrying over from a failed business venture which increases to £131k if you include the yearly allowance. I want to use this up to soak up as much of the CGT obligation as possible. This might include transferring one property in 2016/17 and one in 2017/18/ to use two years CGT allowance. SDLT Obligation This is the responsibility of the the LTD so I would look to cover this by taking a BTL mortgage on the properties and paying directly to HRMC Directors Loan Account By transferring the properties to the business I expect the Directors Loan account to increase by £527k to around £615k. I would like to payback around 2/3 part of the Directors Loan by mortgaging the properties and withdrawing the funds, if that is not feasible I would draw down on the Directors Loan each year up to a limit based on the amount of net profit earned for the same period. Transfer expenses All costs of transfer should be claimable expenses by the LTD or me. The main costs should e covered by the LTD company but any personal expenses to be covered by taking money out of the company. I expect costs to include a solicitor and an accountant, I'm estimating around £1k in total because the transfer and tax calculations should be simple but understand it could be more. Corporation tax I expect to pay 20% corporation tax on net income of around £25k, so £5k PA. £25k covers income from 2 properties and 2 student pods. If I don't transfer the properties I expect to pay 40% income tax on £18k net income from personal property and 20% corporation tax on £7k net income from the ltd, that's £8.4k total tax a year. Year on year I should be saving £3.4k tax per year by shifting from income tax to corporation tax. BTL Mortgage I would like to mortgage both properties to gain extra capital to: 1) Cover the SDLT bill 2) Pay back some of the Directors Loan, this can cover any additional personal CGT above £130k 3) Increase property portfolio. BTL Mortgage would be interest only and eligible for mortgage tax relief within the LTD. Questions? How do I calculate the valuation of my property at the start of rental and as of todays date that is sufficient for HMRC? Are there any restrictions on withdrawing cash from the Directors Loan account with newly mortgaged funds? When do CGT and SDLT payments have to be made, is this an end of tax year payment or immediate? Do you have any other other suggestions or feedback on the proposal and what I may have missed or misunderstood? I hope this is also useful to others who might be in my situation and I'm happy to answer any question others may have.
  25. Hi I would really appreciate any information that you can provide me with on this. I am currently buying my main home with my girlfriend. My parents house was mortgage-free when my dad died, and his share went to my mum. She however, passed his share to me by deed of variation. So I now own 50% of that house. My mum wants to move and I want to buy her share with a mortgage so I can let it out. The property is valued: £400,000 I hope to get a mortgage to buy her share: £200,000 How much SDLT will I have to pay? I already own 50%, so surely I won't need to pay tax on that? Thanks for any advice. Matt
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