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TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15976
Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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We are buying our sole residential house with 75% of the

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Hello, we are buying our sole residential house with 75% of the money coming from my wife's personal funds and 25% from my limited companies funds. How is stamp duty calculated? Is it in proportion to the ownership? or all at the companies additional rate?

Hi. My name is*****'m looking at your question now and will post my answer or ask for more information here in a short while.

Stamp Duty Land Tax is baaed on the price you are paying for the property. The source of the funds and the ownership precentages are irrelevant.

Take a look here for the stamp duty rates. You may have to pay a 3% surcharge on each band if either of you already owns another property and you are not replacing your current main residence.

I hope this helps but let me know if you have any further questions.

Customer: replied 1 year ago.
I know but my question was whether we pay 75% at normal individual person rate for an only house and 25% at the higher companies rate?

Can you confirm that the company will own 25% of the property?

Customer: replied 1 year ago.
that's correct, the company will own 25% of the property


I'm looking at this now.

A company buying 100% of a residential property has to pay the SDLT surcharge on its first purchase of such a property. Where two individuals jointly buy a residential property, the surcharge will apply if one of them already owns residential property and they are not replacing their main home. The government resisted requests for an apportionment of the stamp duty charge where one of the buyers did not own another property, justifying that position by saying it wanted to keep the rules simple. Joint buyers are jointly and severally liable for all of the stamp duty charge. This all leads me to think that as the company is liable to the surcharge on its first purchase of a residential property, the 3% surcharge will be levied on 100% of the purchase price through the bands. However, that's just reading between the lines and I've rarely seen a residential property purchase by a company and an individual jointly and certainly not since the surcharge came into force. The flat rate charge of 15% applies where a company buys a residential property for over £500,000.

I have one two more sources of information to check which I cannot access until tomorrow morning so if you can wait until then, I may be able to be give you a more definitive answer.

Customer: replied 1 year ago.
please, I need a difinitive answer, thanks

The whole transaction will be liable to the additional rates under Schedule 4ZA paragraph 2, sub-paragraph 3, then paragraph 4 under Single dwelling transactions.


I'm just following up to find out if my answer helped or if you have any further questions.

Customer: replied 1 year ago.
Thanks Tony, frankly speaking the link you sent me is as clear as mud but in any case I will not make the purchase this way. Can I please just ask 1 more mini question? ....I have a classic 10 month assured shorthold tenancy and the landlady has agreed that we can sublet to another family for the remaining 7 months. I was going to offer the new family a mirror of my contract, (just change the names and dates). Is there anything fundamentally wrong with that?

I gave you the legislation but it will never say what you want it to in terms we all understand but because the changes are so new, there is nothing on the internet that matches your situation. Ultimately, the answer all derive from the legislation. A basic principle of the surcharge rules is that where than more than one buyer is involved, the worst case scenario from the taxpayer's point of view applies. The surcharge applies to company purchases to stop people buying property through companies to escape the surcharge.

I'm no lawyer but I cannot see a problem with your sublet proposal. You will need to declare the rental income to HMRC.

Customer: replied 1 year ago.
thanks job done


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