Buying house mortgage free - what best way to approach please esp re stamp duty

[elderberryblue]

This is a bit complicated so will try and explain background and details.

I have recently paid off mortgage on my property and did not plan to sell but instead enjoy living in property for a few more years before downsizing (I'm mid fifties).

However, my mother (sprightly 82 year old) has recently been bereaved and has been living with me for a number of months. She owns a property in the EU but not one in the UK (though she did previously)

We have both surprised ourselves at how well we get on and although my mum initially wanted to buy her own place near me we both think that we could pool our resources and buy something that ticks all the boxes.

However this is where it gets a bit complicated as I don't want to sell mine until we have 100% exchanged on somewhere. We have savings that mean we can buy a decent property that ticks all boxes without a mortgage or loan.

Equally although my mum is keen to sell her EU property - the market is pretty slow there.

So the problem we have is that we would be liable for Stamp Duty as have another property each (one abroad).

One way we could get around this is if my DD (30 and renting) buys the house - she is a first time buyer and the houses we want are less that £425K. Once a sale went through (and once mine and my mum's properties are sold) we would then look to add me and my mum to deeds - so we all owned a third. To add I am an only child as is my DD - so no other family to consider.

I would then use money from sale of my UK property to help DD buy a house/flat or whatever she wants (without needing a mortgage) Now I know that may make her subject to stamp duty but it's likely that that property would be less that £250K.

It seems like a good solution but I am sure I have missed something - does anyone have any experience of doing something similar and possible pitfalls?

Many thanks

This would be really complicated

You would have to gift your daughter the money as she would need to prove where it came from

She would then lose her first time buyer status for any future purpose

Your daughter would then need to gift back the property to you and your mum

There would then be stamp duty due on the transfer

You are making it overly complicated

Read this https://www.gov.uk/guidance/stamp-duty-land-tax-buying-an-additional-residential-property#:~:text=If%20you%20sell%20or%20give,part%20of%20your%20previous%20home

As long as you complete within a certain timescale you’ll be able to claim the excess stamp duty back OP

Just buy and pay the stamp duty then claim it back when you sell your current house. You will get the full amount back if it is sold within the stated time frame.

You have a couple of years to sell your property then you can claim back the stamp duty so no need for any complicated scheme.

Also speak to a solicitor because some sales do not attract the second home extra stamp duty land tax in England - it is not always what people expect.

Also make sure your mother knows that if you were to marry and divorce she might lose the new home she shares with you as your new spouse might claim at least half., Or the mother might want to make a gift to you or the grand daughter of all her equity now to avoid IHT later though - so lots of pros and cons of various options and advice needed on reservation of benefit rules where she and you live in the property together. When my mother died my father gave us half the house where he lived on the advice of his lawyer although he died 3 years later so a bit but not all IHT was saved by the earlier gift.

Thank you all - it has been very helpful to see the situation from another perspective.

Having thought the matter over and spoken to DD we/I will take the "hit" on stamp duty and hope to sell property within the three year cut-off.

I agree i over-complicated this - so thanks for sense check

I have done this and claiming the stamp duty back was astonishingly easy so hopefully that's helpful to know