Q&As

A private pension fund is changing its corporate trustees. Two commercial properties will be transferred from Corporate Trustee A to Corporate Trustee B, and the beneficiary (being the private pension fund) is not changing. The consideration for the transfer has not yet been confirmed. Is there an obligation to file and pay stamp duty land tax in respect of the transfer or will this fall within the bare trust provisions because the ultimate owner is not changing?

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Produced in partnership with Michael Fluss of Keystone Law
Published on LexisPSL on 20/08/2020

The following Tax Q&A produced in partnership with Michael Fluss of Keystone Law provides comprehensive and up to date legal information covering:

  • A private pension fund is changing its corporate trustees. Two commercial properties will be transferred from Corporate Trustee A to Corporate Trustee B, and the beneficiary (being the private pension fund) is not changing. The consideration for the transfer has not yet been confirmed. Is there an obligation to file and pay stamp duty land tax in respect of the transfer or will this fall within the bare trust provisions because the ultimate owner is not changing?

A private pension fund is changing its corporate trustees. Two commercial properties will be transferred from Corporate Trustee A to Corporate Trustee B, and the beneficiary (being the private pension fund) is not changing. The consideration for the transfer has not yet been confirmed. Is there an obligation to file and pay stamp duty land tax in respect of the transfer or will this fall within the bare trust provisions because the ultimate owner is not changing?

Stamp duty land tax (SDLT) will, potentially, be chargeable on the transfers by Corporate Trustee A of its interests in the commercial properties to Corporate Trustee B if the corporate trustee does not hold those interests on bare trust for the private pension fund. Whether the holding is on bare trust depends on the terms of the trust instrument under which those properties are held, as explained below.

In order for the commercial properties to be held on bare trust, the pension fund would, by virtue of paragraph 1(2) of Schedule 16 to the Finance Act 2003 (FA 2003) need to be 'absolutely entitled' to the two commercial properties of the fund as against the corporate trustee. By virtue of FA 2003, Sch 16, para 1(3), that would require the pension fund to have the exclusive right, subject to any charges (or similar) on the properties which the trustee

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