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Stamp Duty Land Tax on acquisition of OWN property - Prof Neg claim??

SO (for a friend etc)

 

My friend bought a house with her sister

They are 60/40 on the land registry

Now my friend is buying her sis out and has therefore incurred about 6k on SDLT.

However they were, as far as I can tell, given no advice as to ownership options at the outset as in reality my friend put in about £70k and the sister about £3k --> I really dont know where the 60/40 split came from and there was never any discussion of the consequences on disposition as if there had been they would have chosen a different ownership.

 

In addition there was no ILA given to either party - they just used an online conveyancer, never met them etc.

 

So now my friend is stuck with a 6k bill to "buy" the remainder of her own house she has lived in for the last 2 years.

 

Does it sound like there could be a claim here?

 

Thanks 

 

 

Sdlt will be here based on the assumption of the mortgage debt which they jointly put in to the property. Very common issue between cohabitees.

 

What are you suggesting they would have done even with a qc advising them?

 

 

Negligence being that they weren't told the breakdown in shares before they put pen to paper?  I bet they were though.  This has got "SMEGGY CLUSTERFVCK" written all over it in terms of family arguments rather than anything lacking from the legal boffins.

 

For a start you can't be 60/40 on the Land Registry as they only register the legal title and there will just be a tenants in common restriction.  It may be that they just ticked the box on the transfer to state the percentages but given the way online conveyancers work I'd be surprised if they hadn't taken the opportunity to charge an extra fee by preparing some kind of co-ownership agreement.

Conveyancers don't just make random assumptions about shares in properties so someone must have agreed to the split.  Sounds like one sibling probably didn't read the e-mails closely and left the other to deal with everything and got shafted as a result.

There's no requirement for ILA for joint purchasers in relation to how they hold the property.  There's also no requirement for ILA in relation to the mortgage if both borrowers are going to be on the title.

Sounds like your mate is just pissed off that her sister got one over on her.  Personally I'd have suggested shares in the property based on contribution and would have only have changed that if I was expressly told to.

heh, some people....

seems they managed to come up with some 60/40 formula without advice, so why not 90/10 or whatever? And wot everyone else sed

At the very least they could have looked stuff up online for ideas, bunch of numpties

it says so much about humanity/roffers that everyone seems to assume some dispute between the parties.

no dispute here.

 

Plan had been to sell property together but situation has changed so the 40% is leaving to buy her own place. 

 

The whole thing seemed to have been dealt with badly and i amnot sure proper advice was ever given about the significance of the percentages. The 60% owner was doing 60/40 as a huge help to the 40% so she could have a chunk of money out when they both sold. Clearly noone discussed the other ramifications. 

I just cant help but feel that seeing as the ownership structure has so many impacts it surely should have been discussed at length with them both? 

it says so much about humanity/roffers that everyone seems to assume some dispute between the parties.

no dispute here.

 

Plan had been to sell property together but situation has changed so the 40% is leaving to buy her own place. 

 

The whole thing seemed to have been dealt with badly and i amnot sure proper advice was ever given about the significance of the percentages. The 60% owner was doing 60/40 as a huge help to the 40% so she could have a chunk of money out when they both sold. Clearly noone discussed the other ramifications. 

I just cant help but feel that seeing as the ownership structure has so many impacts it surely should have been discussed at length with them both? 

So the reality was they had an agreemeng about money out ...so 40% after all contributions returned. ..however noone even mentioned a deed of trust or similar...so this was all personal agreements.

If you cant already tell obviously these two are not lawyers (although "fookwit" goes to far and I would bet my life on them being smarter than the poster who said this).

In any case this sort of aet up is clearly complicated for a lay person...hence why I cant underatand how nothing came up in discussion with the lawyer/legal exec/chat bot/ root vegetable doing the conveyancing for them

 

This is a common situation I see comes up through:

 

Divorce

Acquisition of more shares when in a shared ownership scheme

 

So when you say most people deal with it.....

 

Any way I guess another question could then be:

What determines ownership levels? If there is no DoT and the only detail is 60/40 logged on the TR1....and some scraps of paper with personal agreements 

 

 

OR rather....

 

Can anyone see anyway to contest/escape some/all of the SDLT? 

 

Appreciate there may be no way out but I can see how a lay person would NOT jump to the conclusion that they would pay more SDLT on their own property if buying out the other co-owner. Between the two of them now they will have effectively paid SDLT on 140% of the property value. 

Thanks Twelve

would have left ownership as is but the leaving party is trying to buy her own flat. 

I wonder if there is a loan structure that could work but problem would still be there for the outgoing party to find a lender who is happy with this person having a loan bigger than the mortgage they are taking out

 

in terms of the second question..Yeah.... and the amount being taken on is an extra £200k or so 

Don't get the issue here if there is no dispute between the parties.

1 says to 2, yes I'll buy out your 40% to help you get out of this now, but to do  so I'll incur 6k on SDLT, so I'll take that 6k off off the amount I am to pay for your 40%. You still get your money early to do what you want and I'm no worse off because you changed your mind.

Simples.

I'm still not sure what advice you wanted them to be given on the shares.  It's not complicated that you can either work it out on the basis of the amounts you put in or choose a random split.

Some people buying together ask about co-ownership agreements and generally I'd suggest one if it's not a married couple but most people also assume that if they buy together and have agreed the percentages then that's what will happen if they sell or want to buy each other out.

The stamp duty on assumption of an outstanding mortgage is a bit w**k especially where someone buys a property and gets married and wants to give half to their new husband/wife.  Most people know that stamp duty is payable on purchase of an interest in property so shouldn't be a surprise that it applies if you purchase an additional share in a property.  The only time I've owned a share in a property and sold it I transferred it I knocked a chunk off the full value to get it under the stamp duty threshold at the time.

How come the remaining owner doesn't have a mortgage issue on the basis that they will become the sole owner responsible for 100% of what was a joint mortgage calculated on the basis of combined earnings?  Have they considered the fact they'll need the mortgage lender's consent?

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