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Where Taxpayers and Advisers Meet

SDLT - transfer of property from 4 people to 2 people

smilemore
Posts: 38
Joined: Wed Aug 06, 2008 3:49 pm

SDLT - transfer of property from 4 people to 2 people

Postby smilemore » Fri Feb 08, 2019 4:06 pm

I have a question about whether SDLT has to be paid in the following situation:
1. Residential property purchased in 2009 as a BTL investment. Held as tenants in common with 25% share x 4 (2 sets of couples). Purchase price £70,000 so no SDLT paid as prior to the imposition of surcharge tax on 2nd properties.
2. One (married) couple now proposing to sell their 2 x 25% shares to the other (unmarried) couple for £45,000 (i.e. market value of the house is £90,000).
On an individual basis each of the 2 sellers is receiving £22,500 from each of the 2 buyers. So I am thinking this is below the £40,000 threshold so no SDLT to pay or report.
Is this correct or am I missing something?
What land registry forms need to be completed?
Many thanks

SDLT Geek
Posts: 165
Joined: Sun Apr 30, 2017 5:45 pm

Re: SDLT - transfer of property from 4 people to 2 people

Postby SDLT Geek » Fri Feb 08, 2019 5:37 pm

The transaction is for £45,000 and so I would expect the 3% surcharge to be due if the buyers have another property.

Shares in properties are looked at differently for:
(a) Seeing if another property owned "counts against" a person for the 3% surcharge where HMRC accept that one looks at the value of the individual shares.
(b) The property being purchased where we look at the overall price paid by the joint buyers together.

smilemore
Posts: 38
Joined: Wed Aug 06, 2008 3:49 pm

Re: SDLT - transfer of property from 4 people to 2 people

Postby smilemore » Fri Feb 08, 2019 6:34 pm

Thanks for your reply SDLT Geek
So even if we did this as 2 transactions i.e. 1) owner 1 sells their £22,500 share to owner 3; 2) owner 2 sells their £22,500 share to owner 4 - you think we would still be caught by SDLT?

SDLT Geek
Posts: 165
Joined: Sun Apr 30, 2017 5:45 pm

Re: SDLT - transfer of property from 4 people to 2 people

Postby SDLT Geek » Sun Feb 10, 2019 8:31 am

I would expect this to be caught, either:
under the rules for linked transactions or
through a recharacterisation of what has been done into a single transaction.


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