If you are getting married or you are in a civil partnership (or even if you move in with someone) stamp duty land tax can get complicated if there are changes made to the property deeds as a result of the matrimony or partnership.

We have put together a guide to help you work out any stamp duty for married couples and partnerships to make the process easier for you.

Paying Stamp Duty As A Married Couple Or As Partners

It is very common for married couples and civil partners to transfer the deeds to any pre-existing property that is owned either partially or entirely by their spouse. There are many reasons for this such as taking advantage of relief for other tax purposes or as part of an estate plan if they want to make sure that their property is left to their family when one partner dies.

Another common characteristic of married couples or partnerships is when one partner already owns property that they wish to keep and let out and then the pair buy a new home together. Each situation complicates stamp duty land tax for married couples and can make it more difficult to work out how much is payable.

Even if you have already paid stamp duty land tax (SDLT) in full when you first purchased the property there might be a second charge when you transfer ownership to your partner, even when no cash has changed hands.

The only exemption in stamp duty for married couples would be that if transferring ownership of a property to each other they might not need to pay the additional property rates for SDLT.

Stamp duty land tax is based on the ‘consideration’ for the transaction which is usually the price at which the property was purchased originally but this also includes mortgage rates. To work out the total ‘consideration’ of the property you add the money that is being paid for the transferred share of the property and the mortgage rate of the new owner.

An example of how stamp duty works for married couples would be as the below:

Partner A owns a £700,000 property which has a mortgage of £600,000, they then transfer a 50% share of the property to their partner B. Partner B then takes on half (50%) of the mortgage (£300,000) because stamp duty for married couples is based on the amount of chargeable consideration partner B would pay 0% of the £250,000 and 5% of the remaining £50,000 (£2,500 in total.)

Stamp Duty Divorce Exemption

Unfortunately, there are no exemptions for paying stamp duty as a married couple as there is no spouse stamp duty exemption available. However, there are stamp duty refunds for divorce.

The stamp duty divorce exemption states that couples do not have to pay stamp duty land tax if they transfer a share of a property as part of a written court agreement in the case of a divorce separation or marriage annulment or if you are dissolving a civil partnership. This can therefore provide a stamp duty divorce exemption. 

For example; if partners A & B were divorcing and partner A agreed to transfer half of the property to partner B then partner B would not have to pay SDLT.

How Can CapEx Tax Help?

If you are a couple who is planning to separate or who is going through divorce proceedings then it can be important to have a tax consultant look over your separation agreement so see if you can take advantage of the stamp duty divorce exemption.

Where a property is being transferred for any other reasons a couple may be able to reduce the amount of stamp duty land tax that is payable on the property if they structure the transfer carefully. It is important to get professional advice and support to make sure that you aren’t paying unnecessary stamp duty land tax where it can be avoided this can easily be done by contacting CapEx Tax specialists today and telling us more about your situation so that we can help you to save money.