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

sdlt on purchase of both leasehold & freehold from different individuals

pilotprof
Posts:3
Joined:Tue Jan 31, 2017 4:28 pm
sdlt on purchase of both leasehold & freehold from different individuals

Postby pilotprof » Thu Nov 05, 2020 2:52 pm

We are buying a house which is leasehold. We will also buy the freehold. The current leaseholder is not the same as the freeholder. Our solicitor indicates that we should calculate SDLT separately for each transaction, rather than lumping them together. Adding up the total value of each payment would result in higher tax payable. However, the solicitor also indicates that they are not experts in taxation law, and suggests that we obtain tax advice to avoid having to pay a penalty/interest if HMRC take a different view. Having read the relevant bit of the taxation manual, I think that as these are not related transactions, i.e. not to the same individual, then the two calculations should be taken separately. I would find it very helpful to learn from someone more knowledgeable. Thanks for any guidance.

SDLT Geek
Posts:232
Joined:Sun Apr 30, 2017 5:45 pm

Re: sdlt on purchase of both leasehold & freehold from different individuals

Postby SDLT Geek » Thu Nov 05, 2020 6:52 pm

If the two sellers, of the leasehold and of the freehold, are not “connected persons” then two transactions, one from each, cannot be linked transactions.

There is an exception if there is a subsale structure. For example if the existing lessee has a contract to buy the freehold and assigns that to the buyer, then this will cause the two transactions to be linked.

pilotprof
Posts:3
Joined:Tue Jan 31, 2017 4:28 pm

Re: sdlt on purchase of both leasehold & freehold from different individuals

Postby pilotprof » Fri Nov 06, 2020 10:47 pm

Thanks very much for the information. Much appreciated.


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