Consanguinity relief from stamp duty

S

sadie

Registered User
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If I buy a house from my mother (I'm not a FTB), I understand I will only half to pay half the normal stamp duty as the rule of consanguinity applies - however, if myself AND my husband buy this house jointly will this still apply - strictly speaking by marriage, my husband is my mother's relative also?
 
I think if you get the lender to agree to 2 on mortgage 1 on title, put the house in your name only, pay half stamp and then do a voluntary transfer in your husbands name then you will just pay half stamp? (presuming you are buying via a mortgage)
I am open to correction..mf1 or any other legal eagles.
 
Its blood relations only. If you both buy, you will pay stamp duty at the full rate.

mf
 
I think the "way around" probably causes difficulties - back to our tax avoidance/evasion issues. But I can't give a specific reference.

mf
 
Its my understanding that you can do this by way of two deeds,the first from your mother to you and then a second from you to you and your husband jointly.The first deed you get the consanquinity relief and the second is exempt as between spouses. I dont think this causes any stamp duty problems and Im not aware that the revenue consider this to be avoidance/evasion. THe revenue many years ago closed off a similar type of loophole fo gift taxes but seem quite happy for this to go on re stamp duty.I have never heard anything to the contrary.

Obviously you need to be sure that you are paying full value for the property as by the two deeds mechanism above if there is any element of a gift between you and your mother(which might be exempt)there will be a deemed gift of 50% to your husband(which may attract Gift tax )
 
You will need to wait three years after the transfer to you before you can put the property into joint names otherwise the original stamp duty will have to paid.
 
I can't find any reference to a time limit in a stamp duty situation - can you post some reference? I do know that it was very common practice in a property gift situation ( i.e. CAT arising) for the mother/son and then son to son and wife type scenario to take place and that Revenue warned against that as it amounted to a straight gift from mother to son and wife. But not at all sure of my ground as regards a time limit if any in the stamp duty/consanguinity situation.

mf
 
A three year rule applies to C.A.T.; Like MF1, I am unaware of a similar rule on stamp duty.
 
Apropos of this and in case it's of relevance to any readers remember that there is no SD on asset transfers between spouses.
 
I am sure there is no 3 year rule in stamp duty, and almost 100% sure that you can do a second transfer immediately without the revenue having any problem with it i.e without them considering a it to be tax evasion,they have had years and years to close this loophole if they wanted to and have done nothing about it.I have done this for clients without difficulty.
 
If you buy the house from your mother and only your name is on the deed, duty would be charged at half the normal rate on the market value of the house. Your could then transfer the house into the joint names of yourself/husband and no stamp duty would be payable. This is perfectly legal and no 3 year rule applies.
 
Hi All,

I was just wondering if anyone out there has availed of the consanguinity relief where a couple want to buy say the wifes parents house but in order to get the relief they need the bank to issue the mortgage in both names but reference to the title will only be in the wifes name. I am trying to get my bank to do this but they say that it against there policy as it is assisting in tax avoidance. Has anyone come across this or the revenues view on this.
 
Meathman09, did you manage to do this in the end. We are going to be in a similar situation and wondering if we'll get away with it
 
Angelac said:
Meathman09, did you manage to do this in the end. We are going to be in a similar situation and wondering if we'll get away with it
Click to expand...

There's nothing to get away with...it's a perfectly acceptable course of action.
 
Update on consanguinity relief

Hi All, After numerous submissions to the head of ICS i got round the them letting both of us go on the mortgage and my wife on the title only. All deeds now stamped and stamp duty at half rate paid. The amount of people in the bank that did not understand it and just said no was unbelivable. I am an accountant and had to write up a detailed tax memo to get them comfortable so keep trying till you speak with someone that understands
 
Fair play, I know how frustrating that can be. A lot of bank staff really do not have a clue - anything that they feel is in any way complicated is declined until you can prove it should not be.
 
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