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bigduckontax, Accountant
Category: Tax
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I am the seller of a property and the creditor of a mortgage

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I am the seller of a property and the creditor of a mortgage facility on the said property. The terms of the mortgage have not been fulfilled over more than 18 months despite negotiations. If a court order is issued for the repossession of a property from the failed debtor, must I pay stamp duty?

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

No stamp duty is payable under these circumstances.

Customer: replied 2 months ago.
Many thanks Bigduck. Are you able to provide a reference to this information for a solicitor?

As there is no change in fundamental ownership it follows that there is no Stamp Duty liability.

bigduckontax and other Tax Specialists are ready to help you
Customer: replied 2 months ago.
Thanks again. I've been waiting for that answer for some time through other channels. That's helped a great deal.

Thank you for your excellent support.

Customer: replied 2 months ago.
May ask something more in this. If the debtor agrees to return the property to the former owner who is also the mortgage lender, without going to court and obtaining a court order is stamp duty still not owing?

If there is no consideration, no.

Customer: replied 2 months ago.
What does consideration mean in this context?
Customer: replied 2 months ago.
I had an unintended use of double negatives. In other words: stamp duty would be owing without a court order.

Consideration is the amount paid for the transaction.

Customer: replied 2 months ago.
Thanks. So, no consideration; no stamp duty, in the case of repossession.

Correct.

Customer: replied 2 months ago.
Many thanks for the advice!

Pleased to have been able to help.

Customer: replied 1 month ago.
Our solicitor in NW England has struggled to get advice on this so he’s looking for chapter and verse or someone to make a statement. In Justanswer you are virtually anonymous. Are you permitted to speak to an acting solicitor in person? How can we solve this? Thanks.

This is slightly worrying when you consider that it is not so long ago since the solicitors' monopoly on conveyancing was based on a requirement to collect Stamp Duty! Sorry, I can not, Just Answr protocol does not permit that.

Customer: replied 1 month ago.
That’s a shame. I will try to find someone.

Please to have been able top help.

Customer: replied 1 month ago.
Here is a letter to and from HMR&C over this issue of stamp duty. The wording of the solicitor may have been wrong. HMRC seems to be at pains to point this out. Perhaps it should be clear that this is a voluntary repossession? Or do you see another issue? Thanks for your advice.

In my opinion the original transaction has not taken place and the SDLT should be refunded to the person who paid it.

Customer: replied 1 month ago.
Interesting. Many thanks.

It is worth a try anyway; nothing venture nothing gained!

Customer: replied 1 month ago.
The problem with advice from HMRC is that the reference for the advice relates to shared ownership between Vendor and Purchaser, with the purchaser having the liability. This does not seem to be a good fit. In our case there is no shared ownership between vendor and purchaser. The purchaser owns and the vendor placed a charge on the property to service a debt by the vendor (a mortgage).
https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm04040We will need a clear way forward or a lot of cash in the back pocket in case it doesn't go our way.

Then the vendor would have to pay the tax on the mortgage deed.