To ask how to avoid 2nd home rate stamp duty

[Stampdutywoes]

Hear me out before you attack.

Currently living in rental property after splitting with ex partner. We own the home he is living in jointly.
The landlord of my rental wants to sell and I would like to buy it but the additional 5% stamp duty rate for what would count as a second home is a killer.
Are there any conveyancing solicitors who could advise on how to avoid (not evade) this extra 5%?

I haven’t rejected the responses, I’ve confirmed I will need to negotiate a good price to offset the extra stamp duty.

Thank you.

My username kind of is the joke…

Which is why you wouldn't use an estate agent to do the valuation. 🙄

Pay the fee and have a valuation done by an independant, qualified surveyor. It's never a bad idea to be aware of the current value of your home

Change from joint tenants to tenants in common
This is called ‘severance of joint tenancy’. You should apply for a ‘Form A restriction’.
You can make this change without the other owners’ agreement.
A solicitor, conveyancer or legal executive can help you check what type of joint ownership you have if you’re unsure.

1. How to apply if the other owners do not agree to the changeServe a written notice of the change (a ‘notice of severance’) on the other owners - a conveyancer can help you do this.
2. Download and fill in form SEV to register a restriction without the other owners’ agreement. You can also fill in form RX1 to register a ‘form A restriction’ if you cannot provide any of the evidence of severance options listed in form SEV.
3. Prepare any supporting documents you need to include.
4. Send the form and supporting documents to HM Land Registry’s Citizen Centre. There’s no fee

What is the benefit of doing this?

I think there is perhaps something sentimental here. OP thinks despite not being together her and her ex will inherit each other's houses (as joint tenants) by "never selling them" and avoid the hassle/cost of selling and any tax due on selling.

OP seems to not be considering that life usually moves on and people usually meet new partners - or at least grow apart from their old ones.

If you and your ex are still fond of each other OP and have no one else that you want to leave your assets to you can still leave each other your houses by making wills but if you or your ex meet someone new you aren't tied to each other by these houses.

You can sever a joint tenancy at any time and without your co-owners agreement.
https://www.gov.uk/joint-property-ownership/change-from-joint-tenants-to-tenants-in-common
So if your ex meets someone new he/she is not stuck with leaving you their half of the house. They can simply sever the joint tenancy and make a will (or die without a will and the house would form part of the estate following the laws of intestacy).

Finally you are talking sense - yes I get you are being sarcastic!
You are NOT together, what happens when you have new partners and want to get married or have kids and your ex owns half your house. What if they get into debt and your house becomes collateral.

There is no escape from death or taxes

Owning one property each would be more tax efficient and straight forward. But if that's not what you want to do then people should stop giving you a hard time about it.

Your responses suggest you're doing this partly so your ex can stay in the other house mortgage free which is his preference. If you're going down this road for his benefit then maybe he should pay half of the additional tax.

Make sure someone explains all the CGT implications for you, and less importantly for him, make sure your ownership rights are watertight, don't rely on his will which he can change any time. Make sure you are covered by insurance for loss or damage to your investment in his house.

Then crack on and enjoy your new place. I hope your purchase goes smoothly.

Now that actually made me laugh!

We have known each other for ever and trust each other completely

Thank you, that’s really kind of you

Tbh this just reinforces the sense that you're vulnerable and being taken advantage of by someone who understands the legal and financial dimensions of this arrangement better than you do.

but you split up - will a new partner be happy with the situation or demand a financial split
I can see downsides of your situation but nothing beneficial in it - what are you gaining by not making a clean break

I can see that it could appear that way but it really isn’t

Ok, I'm not a lawyer or accountant but let's use the figures of £2million and £800k. So you both have at least £400k to spare. He gives you £400k and signs a loan agreement saying you have loaned him £600k. Interest could be 0%, RPI, tied to property or whatever you both feel is fair. He doesn't necessarily need to make repayments during his lifetime but he could be made to if he sells the property. Make sure it's in his will or alongside. You transfer your half of the big property to him and buy the new property alone.

A PP said they were probably only pretending to split up to escape the tax and the more OP posts, the more likely that sounds.

If he changes you to TIC and then decides he is leaving his shares to a new partner or A.N other you will be in the very unenviable position of part owning two properties potentially with a complete stranger. In terms of the council tax you will certainly be liable for double on at least one of the properties

I give up. There’s so many red flags here, most professionals would struggle to engage here

If you do this you must register a charge against the property that will ensure you get paid if the property is sold or your ex dies. A solicitor would need to pay you back to clear the charge before the sale could go ahead.

Don't do anything like this on an informal agreement. If your ex changes the ownership to tenants in common and leaves his estate to the cat sanctuary they won't be honouring a verbal agreement. You need a legal charge registered.

and playing the very long game by living in a rental for five years in the hope that the landlord will eventually decide to sell to me?

I have a friend who owns a truly unique property (large, historic, listed). He recently had this valued. The valuation is conducted in a slightly different way from a standard valuation, but it is certainly not impossible, so you should be able to have that done.

That is a good idea even if we don’t intend to sell as it would be interesting to know the value.

There was a thread recently where OP found her ex had done this without her knowledge. I don’t remember the details though.

This is terribly disadvantageous to OP. An unsecured loan for £600k which will be difficult to enforce for all kinds of reasons and has no repayment obligation is worth far less than a share of a property valued at £600k. Having said that, everything on the table has been disadvantageous to OP- renting while he stays in the co-owned property, being co-owners of two properties rather than insisting on being bought out- so she may go for it 😭