*** I don't follow why he would do this, rather than look at the net equity in the property.
Read on McDuff!
John
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*** I don't follow why he would do this, rather than look at the net equity in the property.
redsturgeon wrote:*** I don't follow why he would do this, rather than look at the net equity in the property.
Read on McDuff!
John
PinkDalek wrote:redsturgeon wrote:*** I don't follow why he would do this, rather than look at the net equity in the property.
Read on McDuff!
John
I did and I'm sure it is only me who is confused but I've never understood such matters. Without going too much further off-topic, are you able to explain?
redsturgeon wrote:PinkDalek wrote:redsturgeon wrote:
Read on McDuff!
John
I did and I'm sure it is only me who is confused but I've never understood such matters. Without going too much further off-topic, are you able to explain?
Briefly because Mel used cash for her original deposit while his was mortgaged.
John
melonfool wrote:I'm not taking any account of any agent fees as they are not payable so no need to try to complicate matters with them (other than to remind him he is benefiting from not paying them). And I am not reducing by 10%, that's a daft notion.
melonfool wrote:No I can't "force" a sale, but I can tell him 'oh well, we can't agree, best sell' and see what happens then.
Lootman wrote:melonfool wrote:I'm not taking any account of any agent fees as they are not payable so no need to try to complicate matters with them (other than to remind him he is benefiting from not paying them). And I am not reducing by 10%, that's a daft notion.
It's not "daft" in the sense that it is a fairly standard discount that is applied for tax purposes in these situations. And it's fairly clear that you would struggle to sell half of a 350K house in the open market for 175K, because nobody wants to buy half a house and share it with a stranger.
Lootman wrote:Which is not to say that you should accept any offer you are not happy with. Only that if a neutral arbitrator was considering what number to come up with for a buy-out, some kind a discount like that would probably be applied.
Lootman wrote:The agent fees and selling costs are not a lot but, again, strictly speaking you are selling your half of the net value of the property, which might be 345K rather than 350K.
So playing devil's advocate here, if I were him then I would start with an offer of 345K, dividend by 2, less 10%. That's 155,250. And expect to agree a number somewhere between there and 175K.
melonfool wrote:No I can't "force" a sale, but I can tell him 'oh well, we can't agree, best sell' and see what happens then.
Lootman wrote:Having now read that his child lives there, it's more unlikely that a court would approve a partition sale. They are also undesirable because it means that a court trustee would perform the sale rather than the owners, which I would imagine means that the sales price might not be as good.
Lootman wrote:So either you both have to agree a buy-out or you both have to agree to sell. Given these difficulties I would not have thought that a few hundred quid in stamp duty would be a deal breaker. If it were me I might even offer to pay half of it just to smooth things along, as part of the negotiations that you are going to have on buyout price anyway.
melonfool wrote:I could offer my half for sale I might do that, thanks for the tip. Or, I could just refuse and carry on living there. But you're right - I am happy to pay a few hundred pounds of his stamp duty. As long as he agrees a sensible value for the house and pays half of mine too
Lootman wrote:melonfool wrote:I could offer my half for sale I might do that, thanks for the tip. Or, I could just refuse and carry on living there. But you're right - I am happy to pay a few hundred pounds of his stamp duty. As long as he agrees a sensible value for the house and pays half of mine too
He's actually offered you 175K already? I thought you said he disputed the 350K valuation, even though he was the one who obtained it.
I'd accept his 175K, offer to pay half the stamp duty (whatever it is) and move on. And that's my last word on the subject.
Clitheroekid wrote:
Again, in normal circumstances the chargeable consideration would be assumed to be not just the £180k but also half the outstanding mortgage (£32.5k) making a total of £212.5k and SDLT of 2%, i.e. £4,250. However, because the trust deed entirely exempts you from any liability to pay the mortgage I would argue that the value of the mortgage should be omitted from the calculation. This is because your ex isn't assuming liability for any greater debt than he already has.
So if you do agree to pay half the SDLT make sure you deploy that argument, so as to save yourself £325 on the basis that every little helps!
If your ex won't play ball at all then to be honest it's probably worth instructing a solicitor. The solicitor can then make him a formal Part 36 Offer of settlement. The rules are too complicated to explain here, but basically it puts him at serious risk of a very large bill for legal costs if he rejects it.
Clitheroekid wrote:
In that event you would receive £185k net. In my opinion the SDLT payable would be 2% of that, i.e. £3,600. Incidentally, there appears to have been a misunderstanding by an earlier poster that SDLT is only paid on the balance over the threshold - it's not, once the threshold (£125k) is passed SDLT is paid on the whole amount.
AleisterCrowley wrote:I know next to nothing about SDLT, but had a vague recollection that it was (now?) marginal i.e. nothing on the first £125k, 2% on whatever falls in the next band up and so on.
AleisterCrowley wrote:Ruggabellus Efferus
I just have to look that one up
Clitheroekid wrote:There is definitely no discount for the fact that you can't sell a share in a house. That’s a complete red herring, and is only relevant when valuing a share in a house where one of the joint owners has died.
Lootman wrote:Clitheroekid wrote:There is definitely no discount for the fact that you can't sell a share in a house. That’s a complete red herring, and is only relevant when valuing a share in a house where one of the joint owners has died.
Sorry but I beg to differ. I was explicitly told by both a solicitor and an accountant in a similar situation that the lack of marketability of one half of a house absolutely does devalue that half. And that makes perfect sense because, realistically, how can Mel sell a half share in a house? Who would buy that house with the idea of sharing it with a total stranger? It's like selling a property with a sitting tenant - worth less.
Moreover HMRC explicitly takes this view, at least for the purpose of inferring a capital gain when a half share is transferred for no consideration.
Now, we are talking here about a negotiation and either party is entitled to advance any argument they want, and nobody has to accept any deal that they do not like, for any reason, no reason or a bad reason. BUT it seems entirely reasonable that Mel's ex should assert that a half share is worth less than half a full share.
pompeygazza wrote:I have to ask but will he get a mortgage for 240k? (your 175k plus 65k existing mortgage) If he can't you need to put it on the market.
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