Stamp Duty and Mortgages

Stamp duty is based on the amount of the 'chargeable consideration'. The chargeable consideration for the purpose of stamp duty comprises anything given for the transaction that is money or money's worth. This is usually cash but it can also be non-monetary such as the release or assumption of a debt. Therefore if the property is transferred subject to a mortgage with the purchasers taking over the liability this will be classed as disposal proceeds for stamp duty purposes. The standard rates will apply (ie £175k-£250k @ 1%, £250k-500k@3% and above £500K at 4%). If the property is not transferred for any chargeable consideration (ie no cash or other consideration including no assumption of debt) there should be no stamp duty charge. There are specific provisions that apply to ensure that in determining the amount of debt assumed each person's liability for the debt is taken to be a proportion of the debt corresponding to the share that they own in the property subject to the debt.