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SDLT land swap, linked transactions & higher rate

Exchanging pieces of garden - linked transactions? How is charge calculated?

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Our (unconnected) neighbours are willing to exchange some of their land with some of ours to enable us to widen our drive. Both properties were purchased independently last year from the same vendor.  The market value of the two pieces of land is, say £3K - who knows?  I can't see any relieving provision for this type of transaction so SDLT will have to be paid by both parties on the value of the land exchanged (shame we didn't both negotiate slightly different boundaries when we purchased the houses).  I'm hoping someone can confirm, or put me right if I'm wrong, that the rate of SDLT is fixed by the value of the land being exchanged and not linked to the original purchase costs of the two houses.  SDLT manual confirms higher 3% rate does not apply.

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By Justin Bryant
31st Jul 2019 17:26

Eh? This is well, well below the £125k SDLT threshold and is nothing to do with the original vendor.

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Replying to Justin Bryant:
By TaxAngel
31st Jul 2019 17:58

Yes, that's what I thought but then I went to guidance on submitting SDLT returns to see if one was due: "You don’t need to pay SDLT or tell HMRC about freehold land and property transactions with a total chargeable consideration of less than £40,000, unless the total chargeable consideration includes any linked transactions. It is a linked transaction if all of the following apply:
(i) there is more than one transaction
(ii) the transactions are between the same buyer and seller ..... and
(iii) the transactions form part of a single arrangement or scheme or part of a series of transactions."
The exchange seems to come within that definition because it was between the same persons (ie our neighbours and us), so a return seemed to be needed. It doesn't specifically say that the buyer of each plot and seller of each plot need to be the same person acting in the same capacity for each transaction, just that the transactions need to be between the same buyer and seller. Probably over-thinking it all but there always seem to be bear traps.

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Replying to TaxAngel:
By Tax Dragon
01st Aug 2019 06:42

Eh? You and your neighbour have not previously transacted together. The only "link" is that you both (independently) bought from the same vendor (who, as Justin says, has bogged off).

Actually... read Justin's reply more carefully. Then reread the extract you quoted, also with greater care.

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Replying to Tax Dragon:
By Wilson Philips
01st Aug 2019 07:25

Yep - put simply, there is a single transaction here. Nothing to link.

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