SDLT and charges on property

[Bangoreye66]

Good afternoon.

When divorcing, couples are increasingly having to agree to court orders whereby one spouse leaves the family home but keeps an interest in it until, say, the children grow up, at which point it will be sold. A Mesher Order.

However, the norm these days appears to be to require the departing spouse to transfer the whole of his interest in the property to the remaining spouse, with a charge put on the property to enforce a debt equal to the value of his share of the property.

Do you think this debt and charge represents a 'material interest' in a property for the purposes of SDLT. Specifically, if the departing spouse wants to buy a property for himself while the charge remains in place, will he have to pay the extra 3% SDLT?

Many thanks,

BE

[maths]

Section 48(1) FA 2003 defines "chargeable interest to mean "(a) an estate, interest, right or power in or over land, or (b) the benefit of an obligation, restriction or condition affecting the value of any such estate, interest, right or power". Section 48(1) provides that a "security interest" is excluded from being a chargeable interest and "security interest" is defined in s.48(3) to include an interest or right (other than a rentcharge) held for the purpose of securing the payment of money.

So no 3% SDLT charge.

[Bangoreye66]

Many thanks Maths. KR, BE