Stamp duty on transfer of share of property

proppi2

Hello,

I can't get my head around the rules for stamp duty on transfer of a share of a property despite reading the HMRC rules and examples. Maybe someone smarter than me can help?

The following situation: A married couple and their son own a property (a house) worth 750k as tenants in common, each with a share of 33.33%. There is no mortgage involved. It is the only property the son owns and his main residence at the same time (the parents don't live at the property). The son wants to double his share in the property by paying each parent 125k so that his share increases to 66.66% and the parents' share reduces to 16.66% each. What are the implications in terms of stamp duty? In particular

(1) Is this transfer liable to the 3% surcharge for second properties?
(2) Is this considered one transaction worth 250k (therefore attracting 2.5k stamp duty I assume) or considered two transactions worth 125k each and not attracting stamp duty?
(3) If the transaction does attract stamp duty, can it be split into two transactions (say one this tax year and one next tax year) to avoid stamp duty?

Thanks for your help!

davidmcn

proppi2 wrote: »

(1) Is this transfer liable to the 3% surcharge for second properties?
(2) Is this considered one transaction worth 250k (therefore attracting 2.5k stamp duty I assume) or considered two transactions worth 125k each and not attracting stamp duty?
(3) If the transaction does attract stamp duty, can it be split into two transactions (say one this tax year and one next tax year) to avoid stamp duty?

Off the top of my head:
(1) No, it isn't a different house from the one he already has an interest in so normal rates apply.
(2) For SDLT purposes it's one transaction.
(3) No, a series of related transactions is treated as one for calculating the SDLT due so this wouldn't save anything. And there's no such thing as a "tax year" in SDLT anyway.

proppi2

Many thanks, davidmcn, very helpful!

Regarding point (3): What makes transactions "related"? Or asked differently, if the son wants to buy the remaining part of the property in a couple of years time to then become the sole owner, would this still be a related transaction?