This site uses cookies. By continuing to browse the site you are agreeing to our use of cookies. To find out more about cookies on this website and how to delete cookies, see our Cookie Policy.
Analytics

Tools which collect anonymous data to enable us to see how visitors use our site and how it performs. We use this to improve our products, services and user experience.

Essential

Tools that enable essential services and functionality, including identity verification, service continuity and site security.

Where Taxpayers and Advisers Meet

stamp duty - abusus/usufruct rights

chrisgr
Posts: 1
Joined: Fri Sep 16, 2016 2:39 pm

stamp duty - abusus/usufruct rights

Postby chrisgr » Fri Sep 16, 2016 2:51 pm

Hello,

I was hoping someone could provide some advice as I am in slightly complicated situation.

I am Greek and have been living in the UK for the past 8 years. Along with my wife (british passport) we're looking to buy our first property in England. I'm trying to establish whether I need to pay the higher stamp duty tax. My situation is the following:

Approximately 7-8 years ago my father transferred the ownership of our family home to me. However I do not hold full ownership of the property as he has kept the usufruct rights to himself. As such he can take full advantage of the house (currently live in it) and can even decide to rent it out and obtain the income. As per the Greek law the usufruct rights are not transferable so once he passes away they will automatically come to me at which point I will obtain full ownership. I can sell the house if I want to but the usufruct rights will remain to my father meaning whoever buys it won't be able to use it. The property value is >£40k

The exam question: do I own a property in the eyes of HMRC? I rang the helpline but I don't think they understood the meaning of usufruct rights and were querying whether I have shared ownership and whether my share is worth below £40k. I suppose I own 100% of the property but do not have full ownership as explained above!

Any help/advice would be much appreciated!

zatar
Posts: 1
Joined: Sat Oct 08, 2016 8:51 pm

Re: stamp duty - abusus/usufruct rights

Postby zatar » Sat Oct 08, 2016 8:53 pm

Hi,

I cannot help, but I am in a very similar situation. Have you found out anything in the meanwhile?

Thank you!

maths
Posts: 7537
Joined: Wed Aug 06, 2008 3:25 pm

Re: stamp duty - abusus/usufruct rights

Postby maths » Sun Oct 09, 2016 6:00 pm

I suspect that for SDLT purposes you are treated as the legal not beneficial owner effectively a bare trustee.

Hence it is not taken into account re the 3% SDLT charge.

belephant
Posts: 1
Joined: Wed Mar 29, 2017 2:52 pm

Re: stamp duty - abusus/usufruct rights

Postby belephant » Wed Mar 29, 2017 2:55 pm

Hello - any news on how this was resolved? Finding myself in a similar position!

Any updates highly appreciated.

Thanks

ac340600
Posts: 2
Joined: Wed Jun 05, 2019 2:38 pm

Re: stamp duty - abusus/usufruct rights

Postby ac340600 » Wed Jun 05, 2019 2:59 pm

Hello,

has somebody reached a conclusion on this? I am in a very similar position and would need to find out quickly how to proceed.

Any help is highly appreciated!

AGoodman
Posts: 785
Joined: Fri May 16, 2014 3:47 pm

Re: stamp duty - abusus/usufruct rights

Postby AGoodman » Fri Jun 07, 2019 3:58 pm

As maths said, the owner of the bare title would probably be treated as the equivalent of a trustee and reversionary beneficiary combined. SDLT rules treat the life tenant (i.e. person with usufruct) as the owner.

UK tax law doesn't fit well with usufructs but this is how HMRC generally shoehorn them into the rules.

I would submit on that basis but mention the usufruct on the further info form if you want certainty.


Return to “Stamp Duty, Stamp Duty Land Tax, SDLT”