Buy to let/second home

[andgoodnessknows]

Could someone clarify this hypothetical situation - trying to work out some possible trickery in a divorce...

Person A owns a flat, no mortgage.

They then inherit £300k. To upsize to a house in the area they want to live in, they would need an extra £200k.

1. Could they take out a BTL mortgage on the flat to provide that extra £200k?

1. And would they pay stamp duty on the £500k house or the flat, if the house is the main property and the flat becomes a rental?

They could obviously just sell the flat, but they want to keep the flat as a rental. No idea if that's wise or not.

Thanks very much if you can advise.

Yes you can mortgage another property to buy a different property in cash. How much mortgage you can raise on it will depend on what you can rent it for, and which lender you go with. SDLT is paid on the purchase price of the house you buy, assuming the ownership of the flat is not changing.

Could get BTL mortgage but depends on rent etc. Stamp duty on house will be £37500 or £40000 from 1/4/25. If sell flat within 3 yrs can claim additional duty paid back (£25,000). Note: these figures are for England

But bear in mind that there would be income tax to pay on the rental income(less costs) and Capital Gains on the difference between the original value and sales price if the flat is subsequently sold after it has not been his primary residence(although there is a grace period and annual allowance).