How can I avoid stamp duty when I buy my ex-wife out of the house?

Q My wife and I split up in September 2013 and subsequently got divorced. She stayed in the marital home with our children and I moved out. When we bought the property in April 2012 we paid £9,000 in stamp duty land tax (SDLT). I am now buying her out as she wants to move and get things sorted. I am paying her £200,000 and have been told by my solicitor that I have to pay SDLT of £1,500.

We do have a consent order from the courts but it only mentions how the proceeds of the house will be split if it is sold. It feels morally wrong to have to pay SDLT again so is there any way that I won’t have to pay it? GA

A There maybe a way of avoiding SDLT. When a couple divorces – or civil partners dissolve their partnership – and they agree to split property or land between them, or the property is split under the terms of a court order, there is normally no SDLT to pay on the transaction. The key to getting the exemption from SDLT is that you and your ex-wife formally agreed that she would transfer her share of the equity in the marital home to you as part of discussions “in contemplation or otherwise in connection with the dissolution of the marriage”.

The fact that your court order mentions how the proceeds of a sale of the property will be split suggests that you did agree what shares you would each have in the property post-divorce and how much you would have to pay for that share. So when your ex-wife transfers her share of the equity in the family home to you for £200,000, the transaction should be exempt from SDLT and there will be no need to notify HM Revenue & Customs (HMRC).

However, if you and your ex-wife agreed that you would buy her out completely separately from discussions during your divorce proceedings, there could be an SDLT bill, as there would be if an unmarried couple split and transferred property to each other. In that case, SDLT would be charged on the amount above the SDLT-exempt amount of £125,000.

It would be worth going back to the solicitor who dealt with your divorce to clarify exactly what the position is in your case.