HMRC example for additional stamp duty for spouses
"Mr Smith is transferring 50% of a buy-to-let property that he owns to his wife Mrs Smith. Mrs Smith is paying some cash and taking over responsibility for half the mortgage debt. Mrs Smith owns no other residential property but Mr Smith owns a number of other buy-to-let properties.
For transfers before 22 November 2017, the higher rates will apply to the transfer as Mr Smith owns other residential properties. As a married couple other residential property owned by either spouse is taken in to account in determining whether the higher rates apply.
For transfers on and after 22 November 2017, the higher rates rules disregard transactions solely involving the transfer of interests between spouses or civil partners while they are treated as living together on the date of purchase. ‘Living together` takes the definition in section 1011 of the Income Tax Act 2007. A married couple or civil partners of each other are treated as living together unless they are separated under an order of a Court, or they are separated by a formal deed of separation, or they are in fact separated in such circumstances that the separation is likely to be permanent.
If (before or after the transaction takes place) someone other than the spouses or civil partners has an interest in the property, the transaction will still count as a higher rates transaction. For example, a transaction would not be disregarded where an interest owned by a wife and her otherwise unrelated business partner is transferred to her husband."
How to reduce the SDLT payable on a transfer to your spouse
As we have seen above, stamp duty land tax is payable when you transfer an interest in land to your wife/husband and SDLT is calculated based on the consideration of the transaction. As it is unlikely a husband or wife will pay for the transfer of the interest, then the consideration will be based on the existing debt taken on. Here if an example of how to reduce the consideration for the transaction:
Husband transfers beneficial interest to wife
Ian solely owns a property valued £300,000 with a £275,000 existing mortgage. Ian assigns 99% of the beneficial interest to Jane but doesn't add Jane to the legal title and doesn't add Jane to the existing mortgage debt. Jane doesn't pay any money for the beneficial interest and doesn't take on any of the existing debt (the mortgage on the property) or any other debt; there is no consideration for the transfer. Ian is solely named on the mortgage and solely liable for the repayment of the existing debt. Stamp duty land tax is payable on the consideration, however the consideration for the transaction is nil.
You should call HMRC for help with Stamp Duty Land Tax queries and to confirm your own personal liability on 0300 200 3510 Opening times: 8.30am to 5pm, Monday to Friday (closed weekends).
