DoV. Inheritance. transfer to company SDLT

[rmim]

Hi All,

I have been going in circles for nearly 2 years. Any advice would be appreciated. Solicitor says ask accountant. Accountant say go to solicitor.

I inherited 2 properties 7/Oct/2023. I was advised to put them under a company name as I want to keep them and let them out.

It did not seem worth it for the primary property, as I would lose the RNRB so I decided against it.

But the second property seemed worth it if there was No CGT or SDLT to pay. I have had the paper work to setup to do this but want to confirm if SDLT is due?

I dont think CGT is due. But now Im not sure if SDLT is due as it's going to company not a person.

If SDLT is due I have to calculate it. And what value/date would I use? 2 years has passed.

Thanks

[rmim]

neither house have been transferred yet. they are still on my late mothers name. and a DoV has been done to vary the will to send it to my company name and not my personal name.

[AGoodman]

If you made the DoV within 2 years of your mother's death then this would be exempt under Finance Act 2003 Sch 3 para 4.

https://www.legislation.gov.uk/ukpga/2003/14/schedule/3/paragraph/4

[rmim]

If you made the DoV within 2 years of your mother's death then this would be exempt under Finance Act 2003 Sch 3 para 4.

https://www.legislation.gov.uk/ukpga/2003/14/schedule/3/paragraph/4

Thank you so much for the reply AGoodman.

The solicitor is not in agreement about a few things with the accountant and Im still going in circles. And the solicitor has not provided which part of the legislation she is using.

I will expand soon I and I hope you can help

[rmim]

I will try to summarise
1. Inherited (personally) 2 properties from my mum less than 2 years, probate done, iht tax paid – but properties not transferred to my name via land registry yet.
2. Potential tax savings on rental income long term if second house is transferred to my company name and not my own.
3. Solicitor says yes this can be done via a DOV. Explains that a DOV creates a bare trust by fact of changing the terms of the Will and I must register the DOV on the TRS. They cant do that for me, I must do it or ask an accountant to do it.

I talk to the accountant, he says there is no need, there is no bare trust created. Because both the legal title and the beneficial ownership will be transferred to the new company.

I try to look it up and Chatgpt says it depends how you write the DOV, it must explicitly redirect both legal and beneficial ownership to the new company to avoid creating a bare trust.

The DOV written by the solicitor seems to explicitly redirect both legal and beneficial ownership to my company which is named.

now im confused about that as there might be tax implications if its in a bare trust? And I still have no idea if I must register or not?
The accountant is very confident that I do not have to pay CGT or stamp duty when using the DOV to send the second house to my company.

However when I looked it up on chat GPT

This does not prevent SDLT
• Stamp Duty Land Tax (SDLT) is still charged when land is transferred to a company
• Even though it’s inherited, HMRC treats the company as buying it — and applies SDLT at market value
• So your company will likely owe SDLT on the transfer

Special Rules for Companies
• When a connected person (like you) transfers property to their own company, HMRC applies market value rules for SDLT.
• This applies even if the property never enters your personal ownership and goes straight from your mother’s estate to the company.
• The DoV does not override these SDLT rules.




The chatGPT explanation seems very convincing that SDLT is due, but the accountant say it’s not.


Please help.

[rmim]

If you made the DoV within 2 years of your mother's death then this would be exempt under Finance Act 2003 Sch 3 para 4.

https://www.legislation.gov.uk/ukpga/2003/14/schedule/3/paragraph/4

Thank you for this.

But is this for only people or a company too? Could it be different for a company?

[rmim]

If you made the DoV within 2 years of your mother's death then this would be exempt under Finance Act 2003 Sch 3 para 4.

https://www.legislation.gov.uk/ukpga/2003/14/schedule/3/paragraph/4

Thank you for this.

But is this for only people or a company too? Could it be different for a company?

Excellent question.

In the context of **post-death variations** under UK tax law—specifically **Inheritance Tax Act 1984 (section 142)** and relevant **stamp duty legislation**—the term “**person**” **can include a company**, but **the tax treatment can be very different** when a **company** is involved.

---

### Can a Company Benefit from a Deed of Variation?

**Yes, technically**, a company **can be the recipient** of assets under a **deed of variation** (DoV), but the **tax consequences** are not always the same as for individuals.

---

### How It Affects the Tax Exemptions (Based on What You Quoted):

Let’s look at how each condition applies to a company:

#### **Condition (2)(a)** – **Within 2 years** of death:

This condition applies regardless of whether the beneficiary is a person or a company. So this is **not an issue**.

#### **Condition (2)(b)** – **No consideration** (no payment or exchange of value):

This is where problems often arise with companies.

* If the company **receives the variation without giving anything in return**, and it's purely a redirection (e.g. a beneficiary says “I don’t want this; give it to XYZ Ltd instead”), then the transaction **might** still qualify.
* **BUT**: if the company gives **any money or value in return**, the exemption is **lost**, and **stamp duty** or **capital gains tax** implications could apply.

#### **Condition (2A)** – If consideration **is** given:

Then stamp duty land tax (SDLT) **is** chargeable, and the value of that consideration is used to determine the tax.

---

### Practical Problems With Using a Company

1. **IHT Look-through rules**:
If the company receiving the asset is **controlled by the person who redirected the inheritance**, HMRC may argue that the individual is still effectively benefiting from the asset, which can undermine the DoV for **inheritance tax planning**.

2. **Anti-avoidance**:
HMRC scrutinises DoVs to companies more closely, especially if used to try to shift value into a lower-tax environment.

3. **Company cannot sign a DoV**:
The **company itself cannot make a variation**—only **beneficiaries** (individuals) can. But an individual **can redirect** their share **to a company**, subject to the above caveats.

---

### Example:

Say you inherit a rental property and want to pass it to your **property company** instead:

* If you do this **within 2 years**, **without receiving anything in return**, and sign a proper deed of variation, it **might qualify for exemption** from IHT and SDLT.
* **But**, if the company gives you shares or pays you for it, **it’s a chargeable transfer**, and SDLT would apply based on market value or actual consideration (whichever is higher).

---

### Summary

| Question | Answer |
| ------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------- |
| Can a company receive assets under a deed of variation? | Yes, **if a beneficiary redirects assets to it.** |
| Will the exemption from tax still apply? | Only if **no consideration is given** and other conditions are met. |
| Are there risks? | Yes—**anti-avoidance**, **ownership control issues**, and **stamp duty traps** if not structured carefully. |

---

Would you like help assessing how this applies to your specific situation (e.g. putting an inherited property into your property company)? I can help model the tax consequences.

[rmim]

so as long as my company does not give me anything for the house there is no need to pay stamp duty?

[someone]

I don't know anything about the DoV rules so I'm not commenting on that but on the solicitor/SDLT bit, I had a similar issue where they didn't agree with an accountant re the SDLT calculation. Turned out that they had some software that they enter all the information into and it tells them what the SDLT is - but that all depends on them putting the right information into the right boxes.

In the end I called HMLR, they told me what had to go in each box, I then told the solicitor and then their software calculated the same SDLT as we'd been saying all along - and then the solicitor was happy. (This was a transfer of equity on a mortgaged property)

You might have a similar issue here where the solicitor is disagreeing with your accountant because "computer says so".

Ultimately, you, not the solicitor, is responsible for the accuracy of the SDLT return - but the solicitor might refuse to act if you insist on a different figure to what they think it should be. HMLR were really helpful when I called them and once I said "Simon from HMLR team 21 says..." the solicitor was happy. (It was only 300 of SDLT which took hours and hours to sort out )

[rmim]

....didn't agree with an accountant re the SDLT calculation.....

...Ultimately, you, not the solicitor, is responsible for the accuracy of the SDLT return....

Thank you for the reply someone.
My situation is different but it just goes to show how 2 professionals who should be working from the same law come up with different things, and the sad thing is that we are the ones that will get in trouble if it's wrong.

My solicitor is just there to do the DoV. They dont care about any figures and will not make any comment if there is SDLT or not - their line is we are not accountants.

But I need a properly worded DOV to not pay SDLT if that's possible.

What I have now understood from Chatgpt from AGoodman post:

1. even a company will not pay SDLT as long as the company pays nothing and I don't benefit.
2. but indirectly, I am benefiting as the house is going from me to my company. And the reason im even doing that is because long term there is a benefit.
3. I saw the word Anti-avoidance that seems to be a frightening word, and I dont know if it relates to my situation.