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Where Taxpayers and Advisers Meet

SDLT M07900

NM61
Posts:1
Joined:Wed Jan 27, 2021 6:32 pm
SDLT M07900

Postby NM61 » Wed Jan 27, 2021 6:49 pm

I am Executor to an Estate which is selling a House. We have applied for Grant of Probate but this is unlikely to be with us before 31 March and the buyers wish to take advantage of the reduced SDLT rates available now.
Having looked at HMRC SDLT manual section m07900 it suggests that SDLT would be payable if a contract was 'substantially performed' see below;

'A contract will be substantially performed where the purchaser obtains “the keys to the door” and is entitled to occupy the property (however this is documented) or when the purchaser of a building that is let becomes entitled to receive the rents.

It is immaterial whether the purchaser takes possession under the contract or under a licence or lease of a temporary character.'

My thought was to exchange before 31 March 2021 and allow the buyers to occupy the house conditional upon the Grant of Probate being obtained under the Standard Conditions of Sale governing the contract until completion would this trigger SDLT at exchange?

The buyers will have sold their present house so have no where else to live.

The SDLT manual says that it does not distinguish between private and commercial properties as it has been suggested to me that M07900 would only apply to commercial.

Any comments would be appreciated. Thank you in advance.

AGoodman
Posts:1738
Joined:Fri May 16, 2014 3:47 pm

Re: SDLT M07900

Postby AGoodman » Thu Jan 28, 2021 3:07 pm

s.44(5) FA 2003 says: "the purchaser[, or a person connected with the purchaser,]1 takes possession of the whole, or substantially the whole, of the subject-matter of the contract"

Nothing in there distinguishing resi and commercial property and s.44 is definitely for general application. Obviously its up to the buyers to confirm it as they will be the ones liable for the SDLT.


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