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bigduckontax
bigduckontax, Accountant
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My wife and I bought two leasehold flats and the freehold of

Customer Question

Hi there,
my wife and I bought two leasehold flats and the freehold of those flats. One lease is in my name and the other hers' and the freehold is in joint names. We now wish to turn the two flats back into one house. Our solicitor has suggested that we gift our flats to each other and then we can get rid of the leases and leave a freehold. But she is unsure whether this "transaction", if it is one, will trigger a stamp duty charge, please could you help?
John
Submitted: 5 months ago.
Category: Tax
Expert:  Nicola-mod replied 5 months ago.
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Customer: replied 5 months ago.
please keep looking
Expert:  Nicola-mod replied 5 months ago.
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Expert:  bigduckontax replied 5 months ago.

Hello, I am Keith, one of the experts on Just Answer, and pleased to be able to help you with your question.

If no consideration passes ie no money changes hands then there is no stamp duty payable on this inter spousal transfer.

I do hope that I have been able to set your mind at reat on this matter.

Customer: replied 5 months ago.
Hello big duck,
There are mortgages on each flat which will be paid off, does this make a difference? My solicitor is certain that some stamp duty is due if transfer was from one person to another but may not be due because transfer is to multiples, or something like that. I will run what you said by her this morning. Is it possible that recent budgets have meant that in this situation, stamp is due?
Expert:  bigduckontax replied 5 months ago.

Here is the opinion form the Money Advice Service:

'If you transfer the deeds of your home to someone else – either as a gift or in your will – they won’t have to pay Stamp Duty on the market value of the property. ;

Customer: replied 5 months ago.
But it's not just a transfer, it is followed by the surrendering of the leases to form a new single freehold entity. So a transaction of a kind is occurring.
Expert:  bigduckontax replied 5 months ago.

But there is no consideration this no stamp duty.

Customer: replied 5 months ago.
Hello there,
my solicitor has researched this with a stamp duty land tax expert and the consideration is that there is debt, i.e. mortgages on the two flats. The Revenue will therefore consider the half of each mortgage debt as liable to stamp and if these two figures added together = more than 125k then stamp is payable. We have 550k in total so half of that is 275, so we will pay stamp on that. What the Money Advice Service tells you is true but not true in this case. As far as Revenue is concerned, there IS a consideration, because of the debt. So thank you for your time but I'm afraid I don't feel you've helped.
Expert:  bigduckontax replied 5 months ago.

I will opt out.

Expert:  bigduckontax replied 5 months ago.

I have opted out; this post is just to clear my question list.

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