Postby maths » Sun Apr 23, 2017 11:42 am
If the estate has sufficient assets over and above the 600k property to discharge the 55k estate debts then it seems to me that SDLT is payable on the consideration for purchasing a 2/3rds interest in the 600k property ie 400k.
If, however, there is not sufficient assets (or no such assets) to discharge the 55k (as there is only the property) then the executors need somehow to fund the 55k. The person wanting to buy the other 2/3rds out could, for example, loan the executors 55k to settle the estate debts. That person's loan can then be repaid by way of an allocation of an interest in the property worth 55k leaving the remaining 545k to then be split 3 ways ie 181,667 each. SDLT will then be payable on 181,667 x 2 ie 363,334.
Each beneficiary is entitled to 1/3 of [600 - 55] ie 181,667. Once the buyer buys out the other two they each get their 181,667 as expected.
The buyer loaned 55k and got back 55k as an interest in the property. He then got his 181,667 as expected.