Stamp duty on simultaneous staircasing and resale (shared ownership)

camsoft

Thank you!

unknown147

SDLT_Geek said:

Finance Act 2003 / Schedule 2A / para 1(2).

Not sure why you say the subject matter is different. By the terminology of that act the simultaneous staircasing transaction would be the "original contract", and the follow-up sale would be the "pre-completion transaction". ("Pre-completion" refers to the fact that the follow-up sale is agreed-to before the staircasing transaction completes, even though the follow-up transfer actually takes place afterwards.)

Even if one makes the argument that the subject matter of the original contract is the remaining share of the property, this by definition is a subset of the subject matter of the pre-completion transaction, which is the whole property. It would be preposterous to suppose that having a larger subject matter than the original purchase, would discount a pre-completion transaction from consideration, and the wording in 1(2) does not support this interpretation. The schedule was written to close tax loopholes, and this interpretation would be a massive loophole - just add an extra £1 to the original subject matter, and hey you can avoid tax again.

Furthermore when you cite 1(2) specifically, it seems to me that a simultaneous staircasing transaction satisfies both conditions in 1(2)(a) and 1(2)(b) - "a person other than the original purchaser" in (a) is obviously true, and the legal wording is confusing but "a person" in (b) refers to "the original purchaser" i.e. the person doing the staircasing as defined by 1(1)(a) "a person ("the original purchaser")".

Furthermore both the links awatto88 gave:

healys.com/2015/08/03/beware-the-complexities-of-shared-ownership/
[..]
walkermorris .co.uk/publications/real-estate-matters-autumn-2013/so-long-to-sub-sale-relief/

from professional solicitors says subsale relief is appropriate in this situation. There is also this Telegraph article:

telegraph .co .uk/finance/personalfinance/tax/11715364/We-have-to-pay-7000-stamp-duty-to-sell-our-shared-ownership-flat.-Can-we-avoid-it.html

which says the same thing. In fact I can't find anyone else on the internet that agrees with your assessment that subsale relief is not possible due to "subject matter" being different. It also doesn't make any intuitive sense.