An individual was developing 1 property by converting it into 2 properties.
He has decided to sell it on after getting planning and starting work. The sale value is such that if we split the deeds before sale it will save sdlt (2 lots of 1% instead of 1 lot of 3%).
Are there any anti-avoidance provisions which might catch this or is it quite legitimate.
Andrew
Replies (3)
Please login or register to join the discussion.
Linked transaction summary
You may wish to look a summary of the SDLT linked transactions rules in the following
http://www.chiene.co.uk/pdf/sdltlinktrans.pdf
The February 2006 HRMC statement of February 2006, mentioned on the second page may assist.
Well there may be several issues here depending if this property was his house prior to the development. SDLT aside as this is due on purchase not sale, then I am wonder what your client thinks he is liable to in terms of the gain on the property. This may be seen by HMRC and 'An adventure in the nature of trade' and Income tax will apply. This may have the advantage of ALL costs being deductible, but the resulting gain being taxed at the clients marginal rate not the 18% flat rate of CGT. Regards Peter
Linked transactions?
If both properties are sold to the same purchaser or associated purchasers, they will probable be viewed as linked transactions and so amalgamated for SDLT purposes:
http://www.hmrc.gov.uk/manuals/sdltmanual/SDLTM30100.htm
If totally separate & unconnected purchasers, then probably not, but this situation looks unlikely given the conversion work has evidently not yet been completed.