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Sam, Accountant
Category: Tax
Satisfied Customers: 14157
Experience:  26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
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Good morning, My mother in law is about to sell her house

Customer Question

Good morning,
My mother in law is about to sell her house for approx. £160k with the proceeds she will purchase approx 40% of our house and move in with us. We will then use the £160k as a deposit for a new house and move in to that. Our old house will be my mother in laws residence and the new house will become our main residence. Will we be subject to the new surcharge stamp duty? Note the new house price will be approx. £300k - £350k
Submitted: 1 year ago.
Category: Tax
Expert:  Sam replied 1 year ago.
Hi Thanks for your question - I am Sam and I am one of the UK tax experts here on Just Answer. May I ask with what will she be able to purcahse 40% of your house with IF the £160K that she receives from the sale of her property is to be sued to buy your new home? Will you remain as 60% owners on your current property Will your mother in law pay rent for her share of the 40% ownershipWill you continue to own 60% of your exisiting property? Will mother in law gift you the £160K or will you pay her back? ThanksSam
Customer: replied 1 year ago.
She will purchase the 40% from us with the £160k which we will then use as the deposit. We are lucky to have a fair amount of equity so would not have to pass any of the £160k on to a bank etc.
Customer: replied 1 year ago.
We will continue to own the 60% of the house and the £160k is effectively a gift.
Expert:  Sam replied 1 year ago.
Hi Thanks for your response and can you answer the other questions please Thanks Sam
Expert:  Sam replied 1 year ago.
Hi Thanks Then yes you will be subject to the 3% surcharge as you will have a share in more than one property - ( the only exemption to this would be if the original property is disposed of within 36 months which under the circumstances does not appear will be the case) Also you should be aware that you will also be liable to capital gains on your continuing 60% share of the original residence when it is sold/disposed of - and that mother in law may have Inheritance Tax to consider on the £160K she gifts to you - should she not survive more than 7 years.But as she is making a 40% share purcahse in your existing home - if his is the true value of that share - then there will be no Inheritance tax to consider, but you may wish to look furtehr into this (or list this as a new question as its a new topic and you can always ask for me OR I Can offer you more Q & A time - both of which will incur a further cost I am afraid) But if you require any furtehr assistance with the initial question then please do advise Thanks Sam
Customer: replied 1 year ago.
Sam,Thank you that's what I thought.Regards,Matt
Expert:  Sam replied 1 year ago.
HI Matt You are welcome Let me know if I can assist further - but it would be appreciated if you could rate me for the level of service I have provided (or click accept) Thanks Sam