Q&As

If a married couple gift a property to a bare trust of which their parents are the beneficiaries (and the trustees are the parents and one of the couple), what are the stamp duty land tax (SDLT) consequences? If the couple purchased another property to live in would the Higher Rates of SDLT for Additional Dwellings apply to the transaction? Would this analysis alter depending on whether they bought this property before or after the gifting of the first property to the bare trust?

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Produced in partnership with Sean Randall of Blick Rothenberg
Published on LexisPSL on 06/02/2020

The following Tax Q&A produced in partnership with Sean Randall of Blick Rothenberg provides comprehensive and up to date legal information covering:

  • If a married couple gift a property to a bare trust of which their parents are the beneficiaries (and the trustees are the parents and one of the couple), what are the stamp duty land tax (SDLT) consequences? If the couple purchased another property to live in would the Higher Rates of SDLT for Additional Dwellings apply to the transaction? Would this analysis alter depending on whether they bought this property before or after the gifting of the first property to the bare trust?

The gift would be a stamp duty land tax (SDLT) transaction. If the interest given is not a new lease of the property, the purchaser would be taken to be the couple’s parents. No SDLT would be chargeable if no debt is assumed in the ‘real world’ (or treated as assumed in the ‘SDLT world’) as consideration for the transaction. For the most part, this depends on whether or not the property is mortgaged at the time of making the gift. If it is, the parents would likely assume (or be treated as if they had assumed) the debt. Tax would be chargeable on the amount of the debt assumed in accordance with the relevant set of

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