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Where Taxpayers and Advisers Meet

SDLT - definition of "major interest"

Joined:Thu May 17, 2018 10:13 am
SDLT - definition of "major interest"

Postby Taurusthebull » Thu May 17, 2018 10:33 am


To cut a long story short, I'll summarise my situation. Please excuse my lack of legal experience.

My brother wants me to buy his half of our late father's house, for which his share is valued at about 128,000 pounds sterling.

This query relates to whether I should be paying 3% on the whole of my brother's share in our father's house, or whether I should be paying 2% on the value over 125,000 pounds, which is obviously very much less.

I agreed to buy an off-plan apartment in Malaysia in December 2011, for which the developer still holds the master title. The individual strata titles are supposedly forthcoming, but may yet take another two or three more years. In Malaysia, a ten-year wait is not uncommon.

I signed an SPA in 2012, which outlined the delivery and payment schedule, but not other documents have been forthcoming since then. I occupied the property in 2013. I have paid most of the funds for the property, but I still await the deeds, have yet to pay Malaysian Stamp Duty, and any financial transaction (letting, selling, utilities bills) must go through, and be approved by, the developer.

The nub of the matter boils down to this: is my situation with the Malaysian property construed as a "major interest"?

I would accept that, by dint of my residence, and my theoretical ability to undertake financial transactions involving the property (not tested other than by payment of utilities bills), I would presumably be construed as having a "beneficial interest". However, I don't think I have a "legal interest" since, in the event that the developer goes bankrupt before strata titles are issued, I presumably wouldn't have any comeback other than the goodwill of the administrator or the new owners.

Thanks in advance.


Joined:Sun Apr 30, 2017 5:45 pm

Re: SDLT - definition of "major interest"

Postby SDLT Geek » Thu May 17, 2018 10:22 pm

You might well not get a reply from someone who knows enough about Malaysian property law to say whether the interest you have is equivalent to an English law freehold or leasehold estate.

So have you looked at other ways of approaching this?

1. Is the value of your interest in the Malaysian property less than £40,000?

2. Might the replacement exception apply:
(a). Will you live in your father’s house?
(b). Have you previously owned a property you used to live in but which has since been disposed of?

3. Might a new exception from the Autumn Budget of 22 November 2017 help you?
(a). Do you already have a share of 25% or more in the house?
(b). Have you lived in the house throughout the last three years?

The rules are different if the property is in Wales.

Joined:Thu May 17, 2018 10:13 am

Re: SDLT - definition of "major interest"

Postby Taurusthebull » Tue May 22, 2018 3:19 pm

Thanks for the reply.

The Malaysian property is worth more than 40,000 pounds.

I will live in my father's house when I am in the UK. It is not replacing the Malaysian property.

I have previously owned a property in the UK, hence the two per cent figure (above 125,000 pounds) I quoted for SDLT.

My father passed away last July, and the property is still in his name. He left his house to my brother and I in his will. Hence I assume that we each have a 50% share, endorsed by my father's Will and the Grant of Probate.

As SDLT seems to be self-assessed, as notified to me by HMRC, I feel that all I can do is give them my honest appraisal. That is, that I do not yet have legal ownership, for the reasons outlined in my original post.

I intend to notify HMRC of this, and take it from there.


Joined:Mon Nov 22, 2021 11:25 am

Re: SDLT - definition of "major interest"

Postby enquirer4321 » Mon Nov 22, 2021 11:30 am


Would like to know what came with this.
I am in a similar position with an off-plan property.

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