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TonyTax
TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 16571
Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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Slightly complex one. My wife and I are buying a house. We

Customer Question

Slightly complex one. My wife and I are buying a house. We have been told we'll have to pay stamp duty because I already own a property. But in reality its my mothers house that we remorgaged in 2008-9 in my name so she could do much needed renovations. I didnt live there at the time, nor since. I recieved no money. My mother continued to pay the morgage. Until my sister paid it off with her inheritance money from our father. My mother lives in the property with my sister and her daughter. I have no financial interest in the house, dont and have never earned any rent or income from it. So if I sign the deeds back to my mother will I still need to pay stamp duty?
Assistant: Have you talked to a tax professional about this?
Customer: Just our solicitors.
Assistant: Anything else you want the Accountant to know before I connect you?
Customer: Thats pretty much it.
Submitted: 9 days ago.
Category: Tax
Expert:  TonyTax replied 9 days ago.

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.

Customer: replied 9 days ago.
Thanks
Expert:  TonyTax replied 9 days ago.

You have two problems:

1 On the face of it you own the property as your name is ***** ***** title deeds which I suspect is because it was the lender''s requirement so the stamp duty surcharge is payable.

2 If you transfer the property to your mother that will be a disposal for Capital Gains Tax purposes and the gain will be the difference between the value of the property when your name went on the deeds and its value now.

If I were you I'd tell the solicitor what happened and claim exemption from the stamp duty surcharge. The solicitor will have to give an explanation in their submission to the relevant stamp duty office.

I've seen this type of situation before and once an explanation has been provided to HMRC they have accepted that the individual had no financial interest in the property and conceded no CGT was due. The same should apply in your case as far as the stamp duty surcharge and CGT is concerned but it will take a detailed account of the events and you may have a fight with HMRC.

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

Customer: replied 9 days ago.
How should I proceed? Do I need a Tax Accountant to represent me?
Expert:  TonyTax replied 9 days ago.

Not necessarily. If you don't disclose the property transfer to HMRC they may never write to you. If they do, then you provide the explanation.

Expert:  TonyTax replied 9 days ago.

If it were me I'd be inclined to write to HMRC and explain the situation and if HMRC want to charge you to CGT then I'd employ a tax advisor or accountant with good tax knowledge.