Stamp duty additional charge

[worden]

Hi there if someone could please help would be grateful

if an individual holds a share of a house in a discretionary trust, does not live there, and wishes to buy his first home will he have to pay the second home surcharge on stamp duty?
And if the Trust later wound up and his share given to him ?

Thank you

[AGoodman]

If it is a fully discretionary trust - i.e. the beneficiary has no right to anything other than a right to be considered - then it would not be taken into account.

You mention that the individual "holds a share" of the property, which suggests it is not fully discretionary. If you just mean that he has an expectation that the trustees will eventually transfer a share to him, that is fine. But if they actually have any kind of interest in a "share" - e.g. the right to income from it - then it is not fully discretionary.

If it is indeed fully discretionary, and the trustees later exercise a power and distribute a share to him (after he has bought a property) then that distribution would not attract SDLT or affect the earlier purchase.

[worden]

thank you Goodman for your kind reply

In the Trust it does allow for Trustees to apply for benefit of any beneficiary at their discretion , but it also says that on the ultimate date to distribute as percentages given for each individual. So Im guessing not a true Discretionary Trust.

If one of the beneficiaries were to buy a house now whilst in the Trust would they still be a first time buyer (living with parents at present), and would the same apply if Trust had been wound up and sold.?

Is there a best way to mitigate the stamp Duty charge ?

Many thanks for your time

[AGoodman]

If the trustees have a clear discretion over the distribution of income during the Trust Period then it will be discretionary.