Stamp Duty Rebate

Elijah

Hi,


Sorry if I've missed similar discussions but I can't find anything to do with this that answers my specific questions...


I own a small flat and I've recently purchased a large house so I've been stung by the larger 'Second Home' stamp duty rate. I wanted to sell the flat to avoid the extra stamp duty (works out to about £5k) prior to purchasing the house but I couldn't so I've got 36 months to get rid of the flat. In an ideal world, I'd rather keep the flat and rent it out to someone so my question is what are my options?


What would be the consequences of me gifting the property to a relative who I could then collect the rent on behalf of?
Could I sell the flat for a price lower than the stamp duty threshold (£40k is it?) to a relative and, again, collect the rent on their behalf? I expect my only expenses here would be solicitor's fees etc...


Any help would be hugely appreciated!!

Dazed_and_confused

What would be the consequences of me gifting the property to a relative who I could then collect the rent on behalf of?

You have given away a property to save £5k :eek:

Elijah

...to a trusted relative.

00ec25

you can of course commit tax fraud and gamble on not being found out. If that is your attitude then this is not the place to ask for instructions on how to commit fraud.

the legal answer to your question is you cannot avoid SDLT because your plan would entail you retaining "an interest" in the flat since you expect the rental income to be given to you by your "trusted" relative. You therefore fail the test of having NO INTEREST in the property after it has been "sold"

https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm09785
Any entitlement to capital proceeds from the sale of the property, to income or to occupy the property would likely mean that they do have a beneficial interest.