SDLT on Bare trust

[tommerralls]

Hi,

Be grateful if someone can assist with pointing me in the right direction.

If a property was transferred to the owner of a house to hold on a bare trust then the SDLT at the time of transfer was the responsibility of the beneficiary of the trust and not the trustee. I think this is correct?

Assuming SDLT was paid at that time on the consideration (if due) then the subsequent transfer of the property to the beneficiary should not give rise to a second SDLT charge as the beneficiary has already paid on the original transfer. Is this also correct?

Does it also depend on the chain of transactions involved and what was paid when and would not apply if the beneficiary was paying consideration because that would contradict the claim that there was a bare trust?

Any help would be appreciated.

Many thanks

Tom

[section 44]

If a property was transferred to the owner of a house to hold on a bare trust then the SDLT at the time of transfer was the responsibility of the beneficiary of the trust and not the trustee. I think this is correct?

Correct

Assuming SDLT was paid at that time on the consideration (if due) then the subsequent transfer of the property to the beneficiary should not give rise to a second SDLT charge as the beneficiary has already paid on the original transfer. Is this also correct?

Correct - provided that section 75A (anti-avoidance rule where there are scheme transactions) is not in point (on the facts presented it does not appear to be in point). Whilst it is a valuation issue and I am not a valuer, my understanding is that a bare legal title has no/nominal value.

if the beneficiary was paying consideration because that would contradict the claim that there was a bare trust?

Why would that contradict a bare trust? Surely it supports it (I assume that you know what a bare trust is?)

[tommerralls]

Thank you section 44 for your kind response. Much appreciated.

[maths]

If land is acquired by a bare trustee the acquisition is treated for SDLT purposes as an acquisition by the beneficiary.

Any subsequent transfer from bare trustee to beneficiary which is effected for nil consideration precipitates no SDLT (it is exempt).