SDLT & Linked Transactions on change of beneficial interests

SDLT on rental properties

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I am dealing with a husband and wife who wish to transfer the benefical ownership on two rental properties for income tax purposes from 50/50 to 5/95 or 1/99. The properties are both mortgaged and so SDLT will bite on debt assumed by the wife in respect of the mortgage and potentially at the new additional rate. Individually, the consideration on each will be below £40k. However, the aggregate consideration on the two transactions equates to circa 75k. Am I right in saying that these will be treated as linked transactions for SDLT and so tax payable i.e. 3% @ £75k? If so, I am guessing even if they stagger the transactions to take place with a gap of a few months between them they are still likely to be seen as linked?

Am grateful for any input.

Thanks

 

Replies (2)

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By Justin Bryant
29th Sep 2016 10:00

If you speak to an SDLT specialist, you will find that SDLT should be able to be avoided here with careful implementation.

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By BMJS
30th Sep 2016 09:06

I'm not an SDLT specialist I'm afraid but, I am interested in the question.

Assuming the mortgages on the properties are currently joint(?), if they remain joint after the transfer of part of the beneficial ownership, is there any consideration? - I would have thought not.

You would need to consider whether this would affect the availability of tax relief on the mortgage interest for the wife.

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