Transfer and remortgage – what is the consideration?

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“Property owned by mum. Remortgaging as BTL. Value 140k with 90k existing mortgage.  Transferring to mum, son and daughter nil consideration.  Son doesn’t own another property.  Daughter does.

Consideration I would have thought was 60k (2/3 of mortgage debt each party to be responsible of 1/3) although arguably son paying 30 and daughter paying 30.

If the consideration is 60k then an SDLT return is necessary and I would thought daughter has to pay 3%.  If consideration 30k each then the additional 3% SDLT would not be payable as under 40k

If it is 60k how do you break this down on the SDLT form so they know why SDLT only payable on 30k at £900.00 or would it be payable on the 60k at £1800.00 as one of the buyers own another property?”

Source: BLG Member 

If one of joint purchasers has a major interest in another dwelling worth £40,000 or more which is not subject to a lease with an unexpired term of more than 21 years, the transaction will be a higher rates transaction and subject to the 3% surcharge if there is consideration.

The son and daughter as joint purchasers will be treated as giving consideration of  2/3 of the outstanding mortgage, £60,000.  This will exceed the £40,000 threshold for the surcharge. This means that the transaction will subject to the surcharge at the rate applicable to that total consideration of £60,000 (paragraphs 2(2) and 3 Schedule 4ZA FA 2003).

At the time of publication this response was correct however as tax legislation and practice change from time-to-time you should take specific advice before taking any action.

For further information on SDLT please see Ann’s Stamp Duty Land Tax Questions & Answers. This is a free resource that covers a wide variety of SDLT queries and they can be filtered by subject to find specific queries of interest.

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