Stamp duty question - buying flat with leasehold and entire freehold

confusedaboutforms

I am buying a leasehold flat that comes with the freehold for the entire building (consisting of our flat and one other flat, which we are not buying). I am confused about how to fill in the SDLT1 form - the solicitors have sent a draft form but I am pretty sure they filled it in wrong. Any help would be greatly appreciated!

Question 2. Description of transaction

Solicitors have put F for freehold but should this be A since there is a lease involved?

Question 3. Interest transferred or created

Solicitors have put LG for long leasehold but is this correct? If Question 2 is indeed F then should this not be FT freehold subject to a lease or tenancy?

Question 13. Is this transaction linked to any other(s)?

I assume this is No but is that right if we are buying the leasehold and freehold together for one sum?

Question 26. Number of properties included

Solicitors have put 1 for number of properties, but shouldn't this be 2 since there are two title numbers?

Question 30. Title number, if any

Should this be the leasehold title or the freehold title, or both? And if only one, which form should I use to provide the second title number, SDLT3 or SDLT4? The solicitors have put the leasehold title only.

SDLT_Geek

confusedaboutforms said:

I am buying a leasehold flat that comes with the freehold for the entire building (consisting of our flat and one other flat, which we are not buying). I am confused about how to fill in the SDLT1 form - the solicitors have sent a draft form but I am pretty sure they filled it in wrong. Any help would be greatly appreciated!

Question 2. Description of transaction

Solicitors have put F for freehold but should this be A since there is a lease involved?

Question 3. Interest transferred or created

Solicitors have put LG for long leasehold but is this correct? If Question 2 is indeed F then should this not be FT freehold subject to a lease or tenancy?

Question 13. Is this transaction linked to any other(s)?

I assume this is No but is that right if we are buying the leasehold and freehold together for one sum?

Question 26. Number of properties included

Solicitors have put 1 for number of properties, but shouldn't this be 2 since there are two title numbers?

Question 30. Title number, if any

Should this be the leasehold title or the freehold title, or both? And if only one, which form should I use to provide the second title number, SDLT3 or SDLT4? The solicitors have put the leasehold title only.

I wonder whether there are to be two documents at completion:

(a)  A transfer of the leasehold interest from the current leasehold owner of the flat to you and
(b)  A transfer of the freehold interest from existing owners (often the same people who previously own the two flats) to the new owners (often the same people who will, after your purchase, own the two flats).

If so, then assuming the leases are long leases at nominal rents, then the whole of the price could be shown as payable for (a), in which case the land transaction return form SDLT1 you are looking at, would just be for the leasehold interest.

It depends on the documentation though!  Perhaps your seller owned the whole of the freehold as well as the leasehold flat, and is transferring both interests to you in the same transfer for the overall price, without apportioning the overall price between the two elements?

confusedaboutforms

Perhaps your seller owned the whole of the freehold as well as the leasehold flat, and is transferring both interests to you in the same transfer for the overall price, without apportioning the overall price between the two elements?

This is indeed what is happening. The seller owns the whole freehold and the leasehold flat, while the other leasehold flat is owned by someone else. Both the freehold and the leasehold to our flat are being transferred for one overall price, which as far as I know hasn't been apportioned!

SDLT_Geek

confusedaboutforms said:

Perhaps your seller owned the whole of the freehold as well as the leasehold flat, and is transferring both interests to you in the same transfer for the overall price, without apportioning the overall price between the two elements?

This is indeed what is happening. The seller owns the whole freehold and the leasehold flat, while the other leasehold flat is owned by someone else. Both the freehold and the leasehold to our flat are being transferred for one overall price, which as far as I know hasn't been apportioned!

That is interesting.  If the view can reasonably be taken that all of the value sits in the long lease, then I suggest the return could be done on the basis of the leasehold interest, with SDLT paid on the whole price.

If the freehold has an appreciable value, then I understand that the way the SDLT forms are designed, one cannot put both interests on the same return.  It is a nuisance, but one would need two returns, with the price and the SDLT apportioned, with the returns saying that they are linked to each other.