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JGM, Solicitor
Category: Property Law
Satisfied Customers: 12535
Experience:  30 years experience in property law.
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I have a question about paying Stamp Duty on an existing

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I have a question about paying Stamp Duty on an existing mortgage if I were to take on 100% of the mortgage and my now ex wife is removed. Is stamp duty going to be charged to me again?Secondly, if I were to bring in a new partner onto this existing mortgage, would she need to pay Stamp Duty again? She would be coming into the house with some additional money which would add to her equity share.What complicates this more is that £120K of the mortgage is a Help to Buy loan, of which is going to be paid off by my new partner if she were to join the mortgage.I understand the stamp duty tax threshold is £125K, so I am trying to reduce any stamp duty where possible, even if that was to mean my new partner giving me the £120K to pay off the Help To Buy and it looking like Ive paid it off and its my money in the house rather than her new equity in the house.

Hi, thanks for your enquiry. Does your partner already own her own property?

How much is outstanding on the main Mortgage (I appreciate there is 120K outstanding on the Help to Buy loan)?

Kind Regards Al

Customer: replied 5 months ago.
She has just filled in a TR1 on her old house that she had with her ex, so effectively does not have a property now. Her ex has paid her off (£171k) and that is cash that she wants to put into this house.The value of this house when it was bought was £600k. The outstanding mortgage is £430k the help to buy is £121k.From what I am reading online, it looks like she would be subject to stamp duty by being added to my mortgage. We obviously don't want that.If that is true, we want to figure out how to avoid this... I.e. Can I take the mortgage all in my name, not get charged stamp duty, her "loan" me £121k and I pay off the help to buy directly?
We would then have a solicitor write up an agreement between us that protects her money.
Customer: replied 5 months ago.
Is there any update on this please?

1. The transaction with your now ex wife won’t attract stamp duty as it’s presumably part of an overall matrimonial settlement. 2. If your partner comes into the property and takes a half share, then as the total mortgages are £551 less £121 = £430, and she is essentially “purchasing” half the mortgage debt then stamp duty on £430/2 = £215,000 will be payable which is £2500. If this isn’t what you want then get a solicitor to draw up a Deed of Declaration of Trust to cover her interest and keep the title in your name.

Customer: replied 5 months ago.
My figures were slightly out...
Remaining mortgage is £420K.
So I assume that would be £541K less £121K (Help to Buy being paid off)
My new partner is paying £26K to pay my ex wife off.So is that 541 less 121 = 420
420/2 = 210What happens with the 26K she is paying my ex off with... is that considered at all?Also, I understand there is a 125K stamp duty threshold , so wouldnt that mean its 210 less 125 = 85 that would be subject to tax... or even better, if the 26K is also considered, 59K?
Customer: replied 5 months ago.
Actually, if we were to say I was paying my ex off with the 26K, I assume that isnt then considered at all?
So would it be 210 less 125 threshold = 85 x 2% tax = 1700?

The general rule is that whatever your partner is taking on by way of mortgage debt is subject to stamp duty. So as at the date of a transfer of a half share of the property to her what is the mortgage debt, half it and calculate the SDLT. Up to £250000 it is 2% of the amount above the £125000 rate. Any extraneous payments such as paying off the other help to buy mortgage or paying money to your ex wife are really separate.

Customer: replied 5 months ago.
Right, so if I am understanding you correctly that would be 420,000 mortgage divided by 2 = 210,000
210,000 less 125,000 = 85,000
2% of 85,000 = 1,700 to pay
Customer: replied 5 months ago.
As an alternative... if I were to keep the mortgage in my name only, would I be subject to the tax still myself?
I read the link below and that sounds like if there is a transfer of equity via a divorce, it is taken care of as part of the settlement agreement?

Your calculation is correct. As regards ***** ***** property and the mortgage in your name and doing it as part of a matrimonial settlement I did deal with this in my initial answer to you. There would be no stamp duty to pay.

JGM, Solicitor
Category: Property Law
Satisfied Customers: 12535
Experience: 30 years experience in property law.
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