Example 35A: Individual acquiring a half share of a dwelling with a new mortgage being taken

Matilda owns her main residence in her sole name but lives there with her partner Luke. Matilda and Luke do not own any other dwellings. Matilda now wants to transfer a half share of her dwelling to Luke and they will be taking a new mortgage in joint names.

The chargeable consideration will be based on the value of the existing mortgage -  not the value of the new mortgage - plus any cash sums paid. The existing mortgage on the dwelling is £175,000. As no cash is being paid, the chargeable consideration will therefore be a half share of the existing mortgage, £87,500.

LBTT will not apply as the amount of £87,500 is under the LBTT residential threshold. ADS will also not apply as Luke does not own any other dwellings. However an LBTT return must still be submitted as the chargeable consideration is £40,000 or more.

Information on debt as consideration can be found in LBTT2003.

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