Stamp duty question

[MattS5]

I'll soon be in a position where I'll be gifting money (90% of the purchase price) to a close relative to buy a small starter home.

To ensure I have at least a handle on it not being encouraged to be sold by an unscrupulos relative of hers (her father) , I propose to pay the other 10% of the purchase price and as such have a 10% ownership in the property and have a legal dcoument written up to say as much.

My thinking being that the property couldn't be sold without me knowing about it. I would leave the remainder of the property to her in my will, or should she look to sell it and move at a later time, I'd just sign it over to her.

My question, based on the above scenario, is what stamp duty would I have to pay (technically it's a 2nd home for me, as I wont be living there, but I would have a 10% share in it)
Would I pay 10% of the Stamp duty applicable or all of it?,(shes a first time buyer so wouldn't have to pay anything or it all in normal circumstances)

The property will be around £220k, so at most, If I have to pay it all, then so be it, I'll just have to stomach the £13k hit.

And yes, I will obtain professional advice when the time comes, but just wondered if anyione had been in a similar situation.

[kiethton]

Not an expert but have you thought about doing it the other way, gift the full property value allowing the other person to buy it but register a charge in the property (like a mortgage lender) controlling what happens if a sale is forced.

[Countdown]

kiethton said:

Not an expert but have you thought about doing it the other way, gift the full property value allowing the other person to buy it but register a charge in the property (like a mortgage lender) controlling what happens if a sale is forced.

Interesting

Apologies for thread hijack OP - but i was wondering if this could be a good way of gifting a property to a newly-married couple i.e. if anything goes wrong and they decide to split up then the partner doesn't get to walk away with half the house.

[MattS5]

kiethton said:

Not an expert but have you thought about doing it the other way, gift the full property value allowing the other person to buy it but register a charge in the property (like a mortgage lender) controlling what happens if a sale is forced.

No, I hadn't even considerd it. Thank you, it.s an option to certainly explore as well.

[ferrisbueller]

Had something similar pop up recently and started looking into Deeds of Trust. Didn't get into the full details and process, but may be worth a look.

[Pistaaah]

Put a charge on the house - we did similar when we lent my cousin £30K to get rid of her ex-husband. No sale here obviously, but she can't sell it without us knowing about it/agreeing to it.

Your solicitor will need to do it though and costs about £500.

[55palfers]

Maybe run it by Angela?

[ooid]

Countdown said:

Interesting

Apologies for thread hijack OP - but i was wondering if this could be a good way of gifting a property to a newly-married couple i.e. if anything goes wrong and they decide to split up then the partner doesn't get to walk away with half the house.

I'm also rusty on this topic, but this could be your answer:

1- Make a gift into a trust arrangement.
2- You and your wife(partner) could be trustees along with your son
3- You will invest the capital in a house, but secure the capital back to the trust by way of a mortgage over the property.
4- If there is a divorce, the mortgage would be a debt of the marriage and it would be paid back to the family trust you set up.

This was a few years old subject, I found through my notes, might be outdated - you should get a proper advice. (I will have the same but nice problem in the future! )

[LeoSayer]

IANAL but my understanding is that the higher rate of SDLT will be applied to the property if you are a part owner.

There are other options like a trust or a charge but you really need to consult with a lawyer to find the most appropriate solution given your circumstances and wishes.

[WrekinCrew]

MattS5 said:

... My thinking being that the property couldn't be sold without me knowing about it....

Sorry if I'm missing the point, but if that is the only requirement you can set up a Land Registry property alert for free, and will be notified any time the title is accessed.