Stamp duty land tax (SDLT) is charged on ‘money or money’s worth’, defined very widely to include consideration given directly by the purchaser or person connected with the purchaser.
Consideration is the purchase price plus any additional amounts paid in the transaction (e.g. seller's fees).
Cash is obviously the commonest form of consideration on a sale but as a general rule the market value is used when gifted unless:
• the property is gifted subject to a mortgage when the donee is deemed to take over the donor’s share of the mortgage and SDLT is charged on that amount; or
• the transfer is of connected property.
Example:
Anne owns a BTL property worth £500,000 on which there is a mortgage of £350,000. Anne transfers the property from sole into joint names with her husband Adrian. There is no CGT because gifts between spouses are CGT-free.
Adrian will take over half of the mortgage and be deemed to have ‘paid’ that amount for his half share of the property. SDLT will be payable of £1,750 (£175,000 x 1%).
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