SDLT on transaction in Jun '15 &gifted equity from developer
Discussion
Hi everyone
I purchased a leasehold investment property in June 2015 as part of a 'bulk' deal from a developer, brokered by a property investment agent. The deal was that there was 6% of 'gifted equity' from the developer to me on completion and that the property agent specified that all of the investors (20 or so), had to use a specific solicitor.
The issue I have is that the solicitor has calculated the SDLT off of the full price of £475k (never actually paid by me) rather than the chargeable consideration £446,500 (what was paid, after the gifted equity of 6% on completion). I'm a Chartered Accountant but by no means an SDLT specialist! and having done a bit of research, Finance Act 2003, Schedule 4 Stamp Duty land tax: chargeable consideration, section 50, ultimately says the SDLT should be calculated on the consideration in money or money's worth - to me, that means the price paid and not the full price of £475k which was never actually paid. In my experience, there is never any SDLT on a gift unless the recipient is taking on a mortgage or some liability / debt, which I was not in this case.
The lease and contract clearly state the full premium less the gifted equity under the 'premium' line.
The difference in SDLT is amounting to around £1,400 being overpaid. Do you think I have a claim against the solicitor? They are standing their ground even after I quoted the legislation and gave my interprutation and reasoning.
The solicitor also recorded the reduced price of £446,500 on the land registry document.
I would really appreciate any input anyone has or if they have been through something similar.
Thanks
Del
I purchased a leasehold investment property in June 2015 as part of a 'bulk' deal from a developer, brokered by a property investment agent. The deal was that there was 6% of 'gifted equity' from the developer to me on completion and that the property agent specified that all of the investors (20 or so), had to use a specific solicitor.
The issue I have is that the solicitor has calculated the SDLT off of the full price of £475k (never actually paid by me) rather than the chargeable consideration £446,500 (what was paid, after the gifted equity of 6% on completion). I'm a Chartered Accountant but by no means an SDLT specialist! and having done a bit of research, Finance Act 2003, Schedule 4 Stamp Duty land tax: chargeable consideration, section 50, ultimately says the SDLT should be calculated on the consideration in money or money's worth - to me, that means the price paid and not the full price of £475k which was never actually paid. In my experience, there is never any SDLT on a gift unless the recipient is taking on a mortgage or some liability / debt, which I was not in this case.
The lease and contract clearly state the full premium less the gifted equity under the 'premium' line.
The difference in SDLT is amounting to around £1,400 being overpaid. Do you think I have a claim against the solicitor? They are standing their ground even after I quoted the legislation and gave my interprutation and reasoning.
The solicitor also recorded the reduced price of £446,500 on the land registry document.
I would really appreciate any input anyone has or if they have been through something similar.
Thanks
Del
Delboylee said:
Hi everyone
I purchased a leasehold investment property in June 2015 as part of a 'bulk' deal from a developer, brokered by a property investment agent. The deal was that there was 6% of 'gifted equity' from the developer to me on completion and that the property agent specified that all of the investors (20 or so), had to use a specific solicitor.
The issue I have is that the solicitor has calculated the SDLT off of the full price of £475k (never actually paid by me) rather than the chargeable consideration £446,500 (what was paid, after the gifted equity of 6% on completion). I'm a Chartered Accountant but by no means an SDLT specialist! and having done a bit of research, Finance Act 2003, Schedule 4 Stamp Duty land tax: chargeable consideration, section 50, ultimately says the SDLT should be calculated on the consideration in money or money's worth - to me, that means the price paid and not the full price of £475k which was never actually paid. In my experience, there is never any SDLT on a gift unless the recipient is taking on a mortgage or some liability / debt, which I was not in this case.
The lease and contract clearly state the full premium less the gifted equity under the 'premium' line.
The difference in SDLT is amounting to around £1,400 being overpaid. Do you think I have a claim against the solicitor? They are standing their ground even after I quoted the legislation and gave my interprutation and reasoning.
The solicitor also recorded the reduced price of £446,500 on the land registry document.
I would really appreciate any input anyone has or if they have been through something similar.
Thanks
Del
The developer gave/gifted you 6% "Equity"......thats 6% Equity in the property that you "gained", even though you didn't pay for it, hence SDLT being due...... I'm no SDLT either of course but thats my interpretation, although I would have expected the purchase price on the land registry to reflect the full £475k figure......I purchased a leasehold investment property in June 2015 as part of a 'bulk' deal from a developer, brokered by a property investment agent. The deal was that there was 6% of 'gifted equity' from the developer to me on completion and that the property agent specified that all of the investors (20 or so), had to use a specific solicitor.
The issue I have is that the solicitor has calculated the SDLT off of the full price of £475k (never actually paid by me) rather than the chargeable consideration £446,500 (what was paid, after the gifted equity of 6% on completion). I'm a Chartered Accountant but by no means an SDLT specialist! and having done a bit of research, Finance Act 2003, Schedule 4 Stamp Duty land tax: chargeable consideration, section 50, ultimately says the SDLT should be calculated on the consideration in money or money's worth - to me, that means the price paid and not the full price of £475k which was never actually paid. In my experience, there is never any SDLT on a gift unless the recipient is taking on a mortgage or some liability / debt, which I was not in this case.
The lease and contract clearly state the full premium less the gifted equity under the 'premium' line.
The difference in SDLT is amounting to around £1,400 being overpaid. Do you think I have a claim against the solicitor? They are standing their ground even after I quoted the legislation and gave my interprutation and reasoning.
The solicitor also recorded the reduced price of £446,500 on the land registry document.
I would really appreciate any input anyone has or if they have been through something similar.
Thanks
Del
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