Reply With QuoteYep it will
Looking for a bit of advice on this subject from some of our more knowledgeable members.
My current situation is that my wife and I 'rent' her parents property from them while they live overseas. They have advised they are considering returning to the UK soon so the missus and I have started looking for somewhere of our own.
Now neither of us have ever had a mortgage or bought property however I have recently inherited my late fathers property which I plan to keep as a rental.
Does this mean when we purchase our place together it will be classed as a second home and attract stamp duty accordingly?
Thanks in advance for any advice offered.
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Yep it will
Could your wife buy the house?
Assuming your father’s house is just in your name.
As above.
Might you not also have to pay the 3% surcharge on top of the stamp duty as you're buying an additional home?
Edit: I realise you may be aware of this given your saying 'second home'
Last edited by hughtrimble; 22nd March 2018 at 20:28.
Thanks for the advice so far. Not sure if it would be possible for the wife to buy our place alone as I assume I would have to be on the mortgage application for my income to count.
One other complication, the place I have inherited has not legally been transferred to my ownership yet (slowly in progress). Does it change matters if we were to buy our place before the inherited property legally became mine?
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If you’ve never lived in your fathers home then it won’t be a residence for you
If you take proper specialist advice then you may have a pleasant surprise
But those suggesting wife owns one and husband owns the other are completely wrong and haven’t read the first bit of the anti avoidance legislation
PM me and I might be able to steer you to the right advisor BUT you have to be totally transparent and give them all the required info
You’re right, I haven’t!Originally Posted by dandanthewatchman
I guess that’s a non starter then!
My understanding is the assessment of whether you are subject to the additional 3% is based on your home ownership as a couple - so it doesn't help buying it in your wife's name.
One other thing is that i would expect both you and your wife won't probably be eligible for the reduced stamp duty on a first home (my reading of the rules), unless you sell your inherited property first.
My situation was that i have a flat in my name only. My wife was going to buy a first property in her name and it would be a first time purchase, but the rules indicate the transaction would attract the extra 3% and in addition she wouldnt get the first time buyer relief because there is an exclusion which said that if the transaction was subject to additional tax then, then she wouldn't be eligible for the first time buyer relief.
The rules are a bit complex so may be worth getting some professional advice, on the position and potential mitigating options, particularly if it is a really large purchase.
When did your Father die?
I think there may be a solution that could kill several birds with one stone. Just to add, I’m a trust and tax adviser. SDLT isn’t my specialism but I know someone who is expert in that tax and will run my thought past him.
Will be happy to chat off-forum.
Is it always the case that it’s the second pirchase that you pay the duty on, or your residence, or the highest/lowest value property etc?
As far as I understand, if you own a property anywhere in the world, then the 3% extra stamp will apply on any property you purchase in the UK.
One thing to consider is how much you are planning to spend on your own property and what the resultant 3% extra would cost compared with the cost of seeking advice. The same would apply to perhaps changing title on the inherited property prior to your own purchase (i.e. to Ltd Co.)
Either way, you’ll have fees to HMRC or fees to tax advisor. It just depends which would work out best in long term.
Take up draftsmanns offer of the PM.
Its the one you are buying that would result in you having more than one property “at the end of the day of the transaction” as HMRC call it.
You can own a buy to let and if you move house then, generally, you don’t pay the extra 3%.
If you buy the house before you inherit the second you’d avoid additional stamp, otherwise you pay it.
Not helpful to OP but I’m curious, what is the date of inheritance - on death, probate granted or something else?
On death.
EDIT - post deleted as leaving this to the experts
Last edited by thegreatdogwood; 24th March 2018 at 10:06.
Thanks!
Sorry to butt in but may I ask, is it possible to move the status of my current property to a 'buy to let' as I intend to rent it out? If so, would that then mean I could purchase a second property that I intend to live in and not have to pay the additional duty for a second home?
I thought the higher rate was to stop the buy to let sector getting any bigger? Bit pointless if you are able to do the above.
AFAIK if your name is on a second property you pay the higher rate, but that’s just hearsay and this thread needs the correct answer from someone in the know
Inherited properties
If you inherit half or less of the major interest in a property in the 3 years before you make a purchase, and you don’t already have an additional residential property, you won’t pay the higher rates on that purchase.
https://www.gov.uk/guidance/stamp-du...ntial-property
This kind of confuses me. Presume this means that if you buy a property within 3 years of inheriting one (max 50%), then additional stamp duty is not payable on the new purchase?
No, because you’ve not replaced your main residence. It needs to involve the sale and purchase of a residence.
Likewise, if someone lives with their family and owns a buy to let then buys a permanent residence then the higher rate is also due.
Registration of death or the moment as defined by relevant medical staff?
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