Father (UK resident) wishes to gift his main residence to son who is non-resident. There is no mortgage on the property. I contend that no Stamp Duty is payable on the transfer is payable. Am I correct?
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You are absolutely spot on.
Obviously there will be SDLT.
Also worth mentioning, if you make statements, it’s always useful to those who respond if you give some indication of the technical basis for your views.
Obviously there will be SDLT.
If you make statements, it’s always useful to those who respond if you give some indication of the technical basis for your views.
David Ex wrote:
Obviously there will be SDLT.
If you make statements, it’s always useful to those who respond if you give some indication of the technical basis for your views.
Nice!
After all that I fooked up! I intended to say "There will be SDLT to consider", inviting the OP to fire up Google.
Got me confused.
You are correct that Stamp Duty won’t apply because the tax in point for property is Stamp Duty Land Tax. You need to consider whether SDLT applies which as WP indicates it probably doesn’t.
To be fair, it’s not helped when the press is full of stories about how Mr and Mrs Blair avoided Stamp Duty on property purchases. (Then again, perhaps they did - I have absolutely no interest in the non-stories so haven’t bothered to check when the heinous crimes were committed.)
I thought it was because shares in a property company were transferred rather than the ownership of the properties.
If we're being pedantic, then SDLT might not be relevant either - the house might be in Scotland or Wales.
Quite right, we need a ratio of Scottish input on here corresponding to our population as a percentage of the UK population, I think A Web may even be one of Nicky's grievances (She has rather a lot)
If there is no consideration and no mortgage I thought no SDLT.
I assume you have addressed the obvious capital taxes potentially in play.
You're happy that the gift doesn't save IHT and that it will cost CGT when the son sells the house, if property prices increase.
I wonder why the gift is being made. An attempt to make the local council tax payers pick up care home fees?
Will son have tax to pay on deemed rent in his country of residence? Or wealth tax? Once upon a time in the UK owner occupiers paid tax under sch A on a notional rent.
What happens if the son is bankrupted or is involved in a messy divorce?
"An attempt to make the local council tax payers pick up care home fees?"
Councils are getting much more efficient at spotting when this happens - and have the right (I forget what it's called) to apply a GWRB-like approach (i.e. to disregard the disposal when ascertaining care home fees).
As you say, I wonder why the gift is being made? How people think they can ask a question without disclosing their objective(s) always puzzles me.
To be fair, the objective(s) should have little or no bearing in this particular case. The OP was not (as far as I can tell) seeking advice on the merits or otherwise of the proposed gift, on possible alternatives, or on any other consequences. Simply whether or not Stamp Duty (sic) would apply. I don't consider that any other information is required in order to answer that question with a reasonable degree of certainty.
You've received the advice on SDLT, that you didn't quite ask for, it seems to me to be a fair quid pro quo that you satisfy folks curiosity about the purpose of the transaction. There is a nagging doubt caused by your constant misnaming of the land transaction tax in England and NI that your client might not be getting the best advice.
I, for one, am now curious about your caginess.
Another possible motive of your client might be an attempt to defraud his creditors.
Well, if he won't come clean on purpose then when you reply to him caveat your answer re the SDLT point by ensuring you cover yourself by stating you are making no comment re the advisability for tax purposes or otherwise of his making the proposed gift to his son- if you do not then notwithstanding his reluctance to explain to you you likely cover yourself re your PII and your professional body.
Frankly I could not have done this with a client, it is akin to a patient asking a doctor for a pain killer prescription and the doctor just doing it without doing an examination of the patient.
OK, fair comment ... I was distracted by the passing reference in MUL's response - and, any lack of a statement of objective being one of my bête noires, I duly bit down on the hook!
I suspect TD would have been harsher re my inconsistency ... but I still miss her 'marking my homework' from time to time. What on earth did she do to warrant becoming one of les disparues?
To give a precise answer, yes. But taking "Stamp Duty" as a lazy term to include all relevant land transaction taxes in the UK ...
Given my apology, that's both harsh and uncalled for ... from someone asking for help. Especially since all I did was "wonder why the gift is being made?" ... whilst responding to someone else, not you!
Just a quick mention of the GWROB rules. Presumably the son (not UK resident) will not be occupying the property, so will that mean that dad will remain in occupation? And yes I know that wasn't the question; just thought it worth a mention.