Share this content
8

Declaration of Trust / Form 17

Husband and wife - Stamp Duty ??

Didn't find your answer?

Search AccountingWEB

Husband and wife own several rental properties.

All are mortgaged and owned 50/50.

If a deed of trust in put in place, and form 17 submitted, to alter the ratio to 20/80, are there any SDLT implications ?

Thanks

Replies (8)

Please login or register to join the discussion.

avatar
By Martin B
12th Mar 2019 16:22

John. SDLT may be payable and is dependent on the mortgage amount that is being transferred over , ie this is the consideration.
if you are transferring more than £125k of the mortgage , then SDLT will be payabe at a mimum rate of 1%.
Higher rate of SDLT is does not apply to transfers between H and Wife

Thanks (0)
avatar
By Justin Bryant
12th Mar 2019 18:06

Why on earth would H transfer any of his mortgage liability to W (or vice versa) when he doesn't have to? I have never seen that happen in about 30 years of practice. Also there is no deemed assumption of debt under sch 4 FA 2003 if just his equity interest is reduced in favour of W (or vice versa) under a DoT, which is what invariably happens without any notification to the mortgagee and the DoT needn't be registered at HMLR.

So there should be no SDLT here.

The above comments possibly incorrectly assume that the following misleading HMRC guidance from the link below applies where no mortgage is assumed (as a matter of fact) nor is deemed to be assumed (as explained above) by the donee:

"Example

A husband decides to transfer a half share in a property he owns to his wife. He doesn’t take a cash payment for this share, but there’s an outstanding mortgage on the property. The amount outstanding is more than the current threshold, so SDLT is payable, even if the husband keeps the mortgage. He must tell HMRC about the transaction."

https://www.gov.uk/guidance/sdlt-transferring-ownership-of-land-or-property

This seems to be a common misunderstanding.

Thanks (1)
Replying to Justin Bryant:
Psycho
By Wilson Philips
12th Mar 2019 18:23

I agree.

And as I’ve mentioned elsewhere some of the other text in that guidance is extremely poorly worded - and appears to contradict that example.

Thanks (0)
Replying to Wilson Philips:
avatar
By Justin Bryant
13th Mar 2019 09:42

But, the DoT needs to be drafted by an SDLT specialist in this case (since they are both presumably currently on the mortgage unlike in HMRC's incorrect example above) to ensure there is no SDLT - as has been mentioned here many times before.

Thanks (0)
Replying to Justin Bryant:
Psycho
By Wilson Philips
13th Mar 2019 11:07

I'm not disagreeing, but wondering why that is relevant to my simple observation that HMRC's guidance is very poorly drafted and appears to contradict itself.

Thanks (0)
Replying to Wilson Philips:
avatar
By Justin Bryant
13th Mar 2019 13:02

You have a tendency to read things into comments that aren't there! See:

https://www.accountingweb.co.uk/any-answers/interesting-vat-case

Thanks (0)
Replying to Justin Bryant:
Psycho
By Wilson Philips
13th Mar 2019 13:10

That makes just as little sense. In this case, if anything, I'm failing to read something that might be there. Can you explain the relevance of your above comment re careful drafting to my simple observation that HMRC's guidance is poorly drafted and self-contradictory. Otherwise your comment just appears, to me at least, to be a non-sequitur.

Thanks (0)
Share this content