Deposit and stamp duty payment

[coolpatterngirl]

I've been unable to find the answer online and hoping someone can help me.

The house we'd like to buy is going to cost us deposit wise approximately £10k more than budgeted. We can pay the amount but this would come out of the amount set aside for stamp duty and legal fees.

I notice that HMRC require the stamp duty to be paid within 30 days of completion. Are we able to proceed with an offer whilst we save the outstanding £10k over the next 2 to 3 months?

The stamp duty will be paid on the day of completion - your solicitor takes it, along with his fees and the house deposit.

so the answer to your question is a tentative 'yes' - you don't need to pay the stamp duty yet and given the time taken for house purchases to go through, you've got time to save.

BUT remember once you exchange you are committed, so if there's any chance of not having the money think very hard.

your solicitor will advise you about timescales for when he/she needs the money, so talk it through.

Yes to the above caution - and making sure the vendor knows your offer is subject to a 3? month completion (as they may be needing a 6 week sale and you can bet the Estate Agnt hasnt thought of letting you know!).

Thank you, wise advice.

In the worst case scenario, although a gifted deposit is frowned upon, a gifted stamp duty payment would be acceptable, no?

Is a gifted deposit frowned upon? I can't see why a gifted stamp duty payment should cause any issue.

Yes gifted deposits cause all sorts of raised eyebrows in tax departments (inheritance tax matters I think) and although strictly speaking any sort of "gift" should cause the same reaction it doesnt!

A gifted deposit is only usually relevant in relation to the actual purchase of the house (you will be asked on various forms where / how you are funding the purchase other than by way of mortgage) - basically a lender wants to ensure you are not borrowing any other money or someone else has a claim to the property.

The costs (i.e. stamp duty) are separate and if you are being gifted those monies, then its not the same. However, your solicitor will usually prepare a completion statement setting out all the costs about a week before the completion date and it will set out the total amount they need from you (including costs / stamp duty etc) in addition to the mortgage monies they'll get from the lender. The solicitor will want that balance well before completion (about a week before).