30-05-2025
Virtually unknown stamp duty loophole that means you pay TWICE – and who can avoid it
A VIRTUALLY unknown stamp duty loophole could leave you paying the tax twice.
Cohabiting homeowners who buy their partner out following a separation may find themselves hit with the land tax more than once.
1
Stamp duty is, typically, a one-off payment you make if you buy a property or piece of land over a certain price in England and Northern Ireland.
But if you bought a property with a partner and you're unmarried, you might have to pay stamp duty again if you break up and want to buy their share of the property.
You'll only avoid paying it if the transfer is part of a formal divorce or separation agreement.
The extra stamp duty you might have to pay depends on how much is left on your mortgage and the equity in your property (the part of your home you've already paid off).
You'll only have to pay stamp duty again if the "chargeable consideration" is more than £125,000.
The "chargeable consideration" is the total value of what you're taking on to own the property, such as the remaining mortgage and any equity.
For example, if you pay your ex-partner £100,000 for their share of the equity and take on £200,000 of their mortgage, the total "chargeable consideration" would be £300,000.
In this case, you would need to pay stamp duty on £175,000, which is the amount above the £125,000 threshold for residential properties.
The rules about paying stamp duty after separating from a partner can be tricky, so it's a good idea to speak to a solicitor or tax advisor to work out exactly how much you owe.
Keep in mind that you will likely need to pay for their services.
The Sun's James Flanders explains how to find the best deal on your mortgage
Simon Nosworth, partner at Osbornes Law, said: "If you're married you can be sheltered from having to pay stamp duty upon divorce when you're splitting up assets like a mortgage.
"This is because you've got protection under the Finance Act.
"However, if you're unmarried you don't have this protection.
"Broadly it is unfair, but there is no way around it."
What is stamp duty?
STAMP duty land tax (SDLT) is a lump sum payment anyone buying a property or piece of land over a certain price has to pay.
You pay the tax when you:
Buy a freehold property
Buy a new or existing leasehold
Buy a property through a shared ownership scheme
Land is transferred to you or property in exchange for payment, for example, you take on a mortgage or buy a share in a house
The rate you pay depends on the price and type of property and certain thresholds.
If you are a first-time buyer no stamp duty is due if the property is worth £300,000 or less.
You'll also get a discount if the purchase price is £500,000 or less and will only pay 5% SDLT on the portion from £300,001 to £500,000.
Those who aren't first-time buyers will pay different rates depending on the value of their new home:
If it's up to £125,000 - no stamp duty is paid
For the next £125,000 (the portion from £125,001 to £250,000) - stamp duty is charged at 2%
For the next £675,000 (the portion from £250,001 to £925,000) - stamp duty is charged at 5%
For the next £575,000 (the portion from £925,001 to £1.5 million_ - stamp duty is charged at 10%
For the remaining amount (the portion above £1.5million) - stamp duty is charged at 12%
You'll usually have to pay 5% on top of SDLT rates if buying a new residential property means you'll own more than one.
An HMRC spokesperson said: "Stamp duty in these cases may only be payable on the share purchased, not on the total value of the property."
How to pay the stamp duty
You have to pay stamp duty within 14 days of any transaction date.
If the deadline is on a weekend or bank holiday, you need to make sure your payment reaches HMRC by the end of the previous working day.
You will need your 11-character unique transaction reference number to hand.
This reference will always be made up of nine numbers and two characters (for example, 123456789MC).
You can find this on your paper return or on your electronic SDLT5 certificate.
You can pay online by clicking on the "pay now" button found via
You can also pay by cheque, but must allow three working days for your payment to reach HMRC.
Make your cheque payable to "HM Revenue and Customs only" and write your reference number on the back.
If you've filed a paper return, you need to complete the payslip and send this with your cheque to:
BT Stamp Duty Land Tax
HM Revenue and Customs
BX9 1LT
Send your cheque (including a payslip or quoting the unique transaction reference) to:
Do you have a money problem that needs sorting? Get in touch by emailing money-sm@
