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Stamp duty - main residence and a gift ....
dynamodollishill
Posts: 6 Forumite
Hello,
My wife and myself live with our two children in our 'main residence'.
We are planning to buy a new main residence - but rather than sell the current one we want to gift it to the children via a bare trust (they are under 18).
Would there be SDLT to pay on the transfer into the bare trust? There is no mortgage.
And would we be able to avoid the 3% surcharge on the purchase of the new main residence?
Many many thanks.
My wife and myself live with our two children in our 'main residence'.
We are planning to buy a new main residence - but rather than sell the current one we want to gift it to the children via a bare trust (they are under 18).
Would there be SDLT to pay on the transfer into the bare trust? There is no mortgage.
And would we be able to avoid the 3% surcharge on the purchase of the new main residence?
Many many thanks.
0
Comments
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@dynamodollishill I don't know if the rules have changed since then, but this discussion appears to suggest that since the beneficiary of the trust is a minor, the property will be treated as owned by the parents for SDLT purposes.
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Many thanks ... it's similar but not quite the same. In the case above the child had funds and the trustee (parent) wanted to buy a property with these funds.
It all falls down to whether putting the property into a bare trust counts as a disposal of the main residence. And what would happen if the bare trust trustees were another party? The parents then wouldn't have any interest. This might be getting beyond a forum query.
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sounds like there is plenty of cash but watch out for deprivation of assets. not sure what happens with trusts but would this prevent the children from having FTB privileges?I’m a Forum Ambassador and I support the Forum Team on Debt Free Wannabe, Old Style Money Saving and Pensions boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com. All views are my own and not the official line of MoneySavingExpert.
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The 3% surcharge would still apply on you buying a new property. Special provisions treat properties owned by minors as if they were owned by their parents for the purposes of the 3% surcharge.dynamodollishill said:Hello,
My wife and myself live with our two children in our 'main residence'.
We are planning to buy a new main residence - but rather than sell the current one we want to gift it to the children via a bare trust (they are under 18).
Would there be SDLT to pay on the transfer into the bare trust? There is no mortgage.
And would we be able to avoid the 3% surcharge on the purchase of the new main residence?
Many many thanks.3 -
Aha - that makes sense.
Thanks to all that contributed.
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Sorry one last variation.
We sell our main residence at market value to relative (grand parent) and they pay the extra 3% as it's an additional property.
We buy a new main residence within 18 months. We hopefully don't pay the extra 3%.
At some point after that the grand parents gift the property via bare trust to children. Does that all sound legal and correct?
Appreciate the comments on FTB benefits to children - that was a good thought to add to the whole rather complex set up.
I'll find some questions on the forum I can answer to pass it on. :-)
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I expect that cunning plan would fall foul of the anti-avoidance legislation. I assume there's no purpose to any of the proposed merry-go-round other than SDLT avoidance?0
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Actually the net position on stamp duty is about the same. The only catch we'd be trying to avoid is losing the main residence relief completely because our children have something in trust for them at a future date.If we had the money we'd keep the current main - buy a new main and pay the extra 3%.0
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What do you intend to do with the put into the trust?
Leave it empty?
Rent it out?0 -
Sorry but this plan is just nuts.0
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