Stamp duty change

[Penny Whistle]

My wife inherited her parents' house some years ago. She wants to gift it to our daughter, who will continue to rent it out to the current tenants. She is not a first time buyer and it will clearly not be her residence. How do the forthcoming changes to SDLT on 1st April affect the amount of duty to be paid ? The property's value is about £300,000.

So prior to 31st March SDLT = 5% on £250K = 12.5K, plus 10% on 50K = 5K, total £17.5K.

After 1st April, is it 5% on the first £250K = 12.5K, plus 8% on 50K = 4K, total £16.5K ?

I'm finding it hard to believe that the bill will reduce !

[Mr Whippy]

£17,500 changing to £20,000 according to HMRC calculator?!

[scot_aln]

Presume England -

https://www.gov.uk/guidance/stamp-duty-land-tax-bu...

The higher rates from 1 April 2025
Property or lease premium or transfer value SDLT rate
Up to £125,000 5%
The next £125,000 (the portion from £125,001 to £250,000) 7%
The next £675,000 (the portion from £250,001 to £925,000) 10%

So as above £20k unless you can transfer before April 25 saving £2.5k. You'll need to consider capital gains too. Tax, tax & more tax!

[BAMoFo]

If there isn't a mortgage on the property (which is likely to be the case) I don't think that there is any SLDT to pay when a property is gifted.

[CharlesElliott]

SDLT is one consideration, but dependent on mortgage.

The 'sale' (gift) will be liable to CGT as if it sold at the market rate.

You will need to make sure you no longer retain an interest in the property and it is truly your daughters (in practice and theory) as otherwise it could be seen as a gift with reservation and would remain part of your estate for IHT purposes. (and you still need to pay the CGT).

Basically, tread carefully and get advice.

[Penny Whistle]

BAMoFo said:

If there isn't a mortgage on the property (which is likely to be the case) I don't think that there is any SLDT to pay when a property is gifted.

Is that the case - do you have any reference ?

[BAMoFo]

Penny Whistle said:

BAMoFo said:

If there isn't a mortgage on the property (which is likely to be the case) I don't think that there is any SLDT to pay when a property is gifted.

Is that the case - do you have any reference ?

Example 1 here covers it https://www.gov.uk/hmrc-internal-manuals/stamp-dut...

[CharlesElliott]

BAMoFo said:

Example 1 here covers it https://www.gov.uk/hmrc-internal-manuals/stamp-dut...

For the OP, just be careful as treatment for SDLT (no consideration changes hands) is different than for CGT (property is deemed to have been 'sold' for market value). So don't broadly apply rules for one tax to another.

[Penny Whistle]

CharlesElliott said:

BAMoFo said:

Example 1 here covers it https://www.gov.uk/hmrc-internal-manuals/stamp-dut...

For the OP, just be careful as treatment for SDLT (no consideration changes hands) is different than for CGT (property is deemed to have been 'sold' for market value). So don't broadly apply rules for one tax to another.

Ah, thanks both. I was aware of the CGT angle, but hadn't appreciated the "no consideration" impact.