Q&As

A is a beneficiary of Z’s estate and receives 40% of a property under Z’s will. A and B (spouse) purchase the remainder at 60% of the agreed probate value of the property. Would SDLT be payable on the entire value of the property or the amount paid by A and B for the remaining 60%?

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Published on LexisPSL on 03/02/2016

The following Tax Q&A provides comprehensive and up to date legal information covering:

  • A is a beneficiary of Z’s estate and receives 40% of a property under Z’s will. A and B (spouse) purchase the remainder at 60% of the agreed probate value of the property. Would SDLT be payable on the entire value of the property or the amount paid by A and B for the remaining 60%?
  • SDLT treatment of the first 40% transaction
  • SDLT treatment of the second 60% transaction

The assumption is that the land in question is residential freehold property in England or Wales and that there is no tax avoidance.

SDLT treatment of the first 40% transaction

As explained in Practice Note: Land transactions, chargeable interests and chargeable transactions, a land transaction where there is no chargeable consideration (for which see Practice Note: SDLT chargeable consideration) is exempt from SDLT (known as an exempt transaction).

In the alternative, as set out in Practice Note: SDLT—transfers by Will or on intestacy, an acquisition of a chargeable interest in land in or towards satisfaction of a person’s entitlement:

  1. under a will:

    1. by way of an assent (ie pursuant to a specific devise), or

    2. by way of an appropriation (ie in substitution for a specific bequest), or

  2. on an intestacy

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