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Can the IR tax me twice for changing my property deeds?
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Q My wife and I married in April and wanted to change the deeds and mortgage of my house into both our names, but we've been informed by a solicitor and the Inland Revenue that because the mortgage is over ?120,000, changing either the deeds or the mortgage will incur 50% of the mortgage stamp duty again.
The rationale is that my wife is taking on half the debt (mortgage), which constitutes an element of sale. Surely it cannot be legal for the Inland Revenue to take the same tax from the same person - as the majority earner in the house, I'd be paying - on the same property one and a half times?
TW
A I know it sounds appallingly unfair but this is indeed the case. According to Maria Finelli at the Inland Revenue, the liability to stamp duty depends on whether there is a mortgage or not and how the mortgage lender feels about the potential assumption of debt. If the house was mortgage-free and your wife's name was merely being added to the deeds, then there would be no further liability to stamp duty.
Similarly, where there is a mortgage but the lender is happy that the original borrower - you - will continue to assume full responsibility for the debt, there will be no stamp duty payable. However, if the lender feels this change constitutes a change in the assumption of mortgage debt, a stamp duty liability of 50% of the outstanding mortgage is payable.
The only thing I can suggest is that you talk to your lender to see whether you can persuade it that you will retain full responsibility for the debt after your wife's name is added to the mortgage/deeds, but I'm not terribly hopeful about your chances.
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