stamp duty on second hand house.

[Bronte]

There is a difference between tax avoidance and tax evasion. The former being completely legit and the other not so.

Take the following scenario:

A couple together one buys a house, (PPR) they subsequently get married. Over the years they jointly make a few bob and own other property/shares etc. Decide to move house. To avoid stamp duty only the spouse who had not owned the PPR purchases house for 300K out of their joint savings of 2 million. Don't see how revenue who have any problem with this.

In their wills they leave everything to each other. Second spouse dies and everything goes to first spouse free of tax even the new PPR in the dead spouse's name.

The key here is being married and either partner being able to independently purchase a property. Those who are less wealthy and without the money to pay the initial monies plus get a mortgage solely in their name are the one's who will run into difficulty with the revenue on this.

 

[ClubMan]

There is a difference between tax avoidance and tax evasion. The former being completely legit and the other not so.

Not true - tax avoidance is not always legit as I explained above.

 

[mf1]

"The following is my "advice"

So your girlfriend sells her house comes away with €50k profits. She gives this as a gift to you. (you pay roughly €7.5k tax?). You buy the house with your gift and a bank loan in your name. She rents a room from you for €635 a month under the rent a room scheme - no beneficial interest on her part. If the stamp duty you would have paid is more than the €7.5k gift tax, then you're on a winner.
PS. This WILL go sour if you split up, but you can't base all your decisions on the possibility of a split...."

Brilliant "advice?" for OP - absolute rubbish advice for GF.

mf

 

[DerKaiser]

If they remain together it's fabulous advice, especially if they get married. I'll admit I'm assuming it's a long term stable relationship with a view towards marraige, not for a couple just dating.

 

[Butter]

I don't see what's so lazy about doing things legitimately to avoid trouble further on. The reality is that plenty of people do split up after buying a house together whether married or not (as witnessed by another poster today who is splitting up with his partner 6 months after buying a house together). There would be a difficulty for the OP's girlfriend if that did happen to them in the scenario that he is outlining. Love is not always everlasting!

 

[DerKaiser]

true. it's hard to give financial advice when the success of an action will be based on whether a relationship stays together or falls apart

 

[buzzment]

wow ive opened a can of worms he he..to be honest a lot of this is like reading chinese to me..not my forte all this lark..my gf reading this says its best we pay the stamp duty altho believe me it kills me giving it to our dodgy corrupt government.anyhows cheers guys..

 

[Dreamerb]

true. it's hard to give financial advice when the success of an action will be based on whether a relationship stays together or falls apart

Which means that as financial advice, it's lousy.

You're very happy to accuse others of being "lazy" in giving advice, when you're dishing out suggestions which probably wouldn't have the effect of eliminating the stamp duty liability anyway, and would leave the girlfriend, and probably the OP as well, in a severely compromised situation if the relationship went sour.

OP's girlfriend is right, and they should have both of them on the deeds - and they do have another option, of course, which is that they could seek to buy a new build house and thus entirely legitimately avoid having a stamp duty liability [subject to certain conditions] while ensuring that everyone is legally protected.

 

[ClubMan]

wow ive opened a can of worms he he..to be honest a lot of this is like reading chinese to me..not my forte all this lark..my gf reading this says its best we pay the stamp duty altho believe me it kills me giving it to our dodgy corrupt government.anyhows cheers guys..

If you are liable for the SD then you should pay it. If you are in any doubt as to whether or not you are liable then get professional advice. Certainly don't pay it if you are not liable!

 

[DerKaiser]

In response to Dreamerb:
So people should be happy to pay up to 9% stamp duty if it's only purpose is as an insurance against a messy break up???

Two situations

(A)If they do go on to get married the property can be then put in joint names with no SD liability, then having advised them to pay stamp duty originally in order to put joint names on the house was lousy advice.

(B)If there's a messy break and the BF decides to take the GF to the cleaners then not going in joint names from the start was a lousy idea.

I really don't see why you should base your plans on (B) the worst case, and generally much less likely in a long term relationship, scenario. I mean we could all lose our jobs in the morning and have our houses repossessed, does this mean you'd never advise someone to buy a house in the first place???

 

[DerKaiser]

In fact they should not buy a house together in the first place if they think there's a good chance they won't stay together, as joint ownership is pretty messy where couples split up.
The way property prices are going the GF could be better off by not having the property/mortgage in her name!!!

 

[Dreamerb]

In fact they should not buy a house together in the first place if they think there's a good chance they won't stay together, as joint ownership is pretty messy where couples split up.

I agree completely. But have you any idea how many queries we see from people who have lived together whether having bought together or one party having bought previously, things have since gone south, and now one's trying to work out how to buy out the other / what rights they have, if any, in a house to which they've been contributing but where their name's not on the deeds / whether they can remortgage in one name and how to remove the other name? Most of them didn't think they were going to break up either...

But it happens all the time. And proper forward financial planning has to take account of the fact that not everyone lives happily ever after, and that not being broke and homeless at least makes misery less abject.

Besides which, as I've already pointed out, they can actively seek to buy a new-build home, in which as owner occupiers they'll benefit either from a stamp duty exemption or from a substantially reduced liability.