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I currently own 2 properties in my personal name with my wife owning none. Would it be possible to buy another BTL in her name (to avoid stamp duty as a first time buyer). Also, down the line is it possible to add myself back onto this property too?
No, because you are married your wife won’t be considered a first time buyer for SDLT purposes
If a spouse owns a property, the other spouse loses first time buyer status.
> (to avoid stamp duty as a first time buyer).
No. You're married.
Would divorcing his wife first help?
I agree with others, your wife isn’t a FTB because you have a main residence you own. Also, it’s a BTL, you’re buying not a main residence so you’ll be liable for SDLT and enhanced stamp duty.
In practice, I do wonder if HMRC or anyone would notice. The solicitor who acts may clock on when you declare Source of Funds and your name comes up perhaps. Asides from this I can’t see HMRC knowing. One would hypothetically have to declare that they are the sole buyer and obtain a residential mortgage (with the view of fraudulently using the property as a BTL or obtain consent to let from the lender); after this at a later date hypnotically one could switch to a BTL mortgage and add the husband.
One would have to fraudulently mislead their solicitor (ensuring they don’t provide any evidence which would lead the solicitor to believe they are married/ own other properties) as well as fraudulently mislead the lender that it’s not a BTL but a main residence. You’d then have to submit (or your solicitor on your behalf) a fraudulent SDLT return form claiming FTB relief.
You’ll appreciate given the above why it’s likely not worth the hassle. Even if you do get away with it, you’d just save potentially some tens of thousands of pounds.
> I do wonder if HMRC or anyone would notice.
Not really the point is it? UK tax is self assessed. Just file a self assessment and make it all up. Why bother with tax at all?
I agree, that’s why it would be tax evasion and various counts of fraud. I do not promote it one bit.
From my time practicing I am still waiting to hear back from the various fraud, money laundering and tax evasion matters I had to report to senior partners and the relative government bodies. Hopefully, I’ll hear back soon, although it’s been well over a decade so perhaps not.
Maybe once HMRC is done with getting Amazon, Apple, Microsoft and the like to pay I’ll get a response. I know it’ll go a long way to plugging the £300m they wasted on the Rwanda deal alone.
But in all seriousness, tax shouldn’t be evaded and if like OP perhaps you’re pushing a wealth of over £1m then £10k represents 1% and no one gambles £1m for 1% return. Not to mention if he got caught he’d have to pay back interest, costs, forfeit terms of mortgages, likely trash his credit scores etc.
The common scenario isn’t BTL I would see this in, it would be people who were splitting or joining new partners. The client would often come up with all types of schemes, lies and the like leading to the firm often having to dis-instruct themselves or file a report.
People would feel they were ‘cheated’ out of their first FTB relief. Or that their new partner having a property or having one in the past shouldn’t mean they can’t use their FTB relief.
The struggle I think for many was that it was a do buy/ don’t buy scenario. Some claimed they’d come from abusive relationships and felt not getting their FTB relief back was their ex cheating/ retaining control over them.
I don’t know, terribly emotional situations which would often leads to tears, homelessness and potentially dangerous situations. I held the line but past me the line didn’t seem to exist.
I can't see how any of that is irrelevant. The guidelines seem clear.
I think it’s possible, but your wife may need to be able to show she could afford the mortgage payments on her own.
Also, it would legally be your wife’s house, regardless of whether it’s just you paying the mortgage. Not necessarily a problem, just something to be aware of.
It is not possible to avoid the stamp duty.
But there’s no stamp duty for first time buyers on properties up to £425k, if buying as a residence.
If buying at btl, 3% on the first £250k
OP is not eligible as first time buyer.
Also, second home (btl) stamp starts at 5%.
He wasn’t talking about himself tho
His spouse isn't eligible either.
https://www.gov.uk/guidance/stamp-duty-land-tax-buying-an-additional-residential-property
Where you getting this 5% from?
It was one of the key changes in the last budget, effective immediately: https://www.gov.uk/stamp-duty-land-tax/residential-property-rates