Q&As

A life interest trust is purchasing a dwelling that is already owned and occupied by the trust’s beneficiary. The beneficiary also owns an investment property. Will the 3% higher rate of stamp duty land tax apply to the purchase?

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Published on LexisPSL on 10/01/2019

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

  • A life interest trust is purchasing a dwelling that is already owned and occupied by the trust’s beneficiary. The beneficiary also owns an investment property. Will the 3% higher rate of stamp duty land tax apply to the purchase?

A life interest trust is purchasing a dwelling that is already owned and occupied by the trust’s beneficiary. The beneficiary also owns an investment property. Will the 3% higher rate of stamp duty land tax apply to the purchase?

It is understood that a life interest trust is buying a dwelling from the beneficiary of the trust (the beneficiary is an individual). It is assumed that the beneficiary occupies the dwelling as their main residence and will continue to do so as beneficiary of the trust once the trust owns the dwelling.

A beneficiary of a trust for life is treated as the purchaser for the purposes of the higher 3% rates of stamp duty land tax (SDLT) (paragraph 10 of Schedule 4ZA to the Finance Act 2003 (FA 2003)). This means that the trustees of the trust must consider whether the purchase

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