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Where Taxpayers and Advisers Meet

3% SDLT Tax on 2nd Property

Joined:Fri Aug 06, 2021 12:44 pm
3% SDLT Tax on 2nd Property

Postby smbh » Fri Aug 06, 2021 12:47 pm

Hi all,

I was gifted Property 1 (no mortgage) at 18 by my father. I am now looking to purchase Property 2 with my husband and have been made aware of the 3% SDLT (which works out around £5000 for a 170,000 house purchase price, just as an example). I intend on keeping Property 1 as an asset for the future (I don't want to rent it out & I don't want to sell it at least in the short term 3-5 years which means I can't claim back SDLT).

How can I avoid paying the 3% SDLT?

Can I transfer Property 1 to my mother's name and create a will for my mum which would return the house back to me should my mother pass away?

What other implications are there to this method?

Joined:Mon Mar 11, 2019 4:22 pm

Re: 3% SDLT Tax on 2nd Property

Postby Jholm » Fri Aug 06, 2021 4:29 pm

I'll let someone else respond re: SDLT but transferring the property to your mother will stand to expose you to capital gains tax, on the difference between the value at transfer and the value when you were gifted it.

Joined:Fri May 16, 2014 3:47 pm

Re: 3% SDLT Tax on 2nd Property

Postby AGoodman » Tue Aug 10, 2021 2:03 pm

That probably does work for SDLT provided your mother makes a will to that effect of her own volition and is free to change it. It would not work if you had any arrangement thatshe would give you the property back at a later date.

Obviously giving your property away involves risks other than tax.

As well as the CGT disposal mentioned by JHolm, there's also the fact that the property would be within your mother's estate for IHT. If it's not comfortably covered by her nil rate band, the IHT stands to be much more than your saving in SDLT.

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