Any SDLT experts here?
Discussion
Morning all, and a Happy New Year,
I'm trying to find someone who's knowledgable on SDLT to help with a current situation.
My mum and step dad (unmarried) own equal shares in two properties, one they lived in one they let out as a furnished holiday let.
They've now split up, one of them has remained in the original home and the other has moved into the FHL as they ceased the business in September.
The one living in the original home wishes to move the separation along at pace and fully own the house they're living in, the other party in the FHL has the intention to market it in the Spring and move to another area.
Both parties have paid for tax advice from accountants regarding SDLT, unfortunately the advice differs, one says it will have to be paid, the other says it doesn't.
The value of the shares of each house to be exchanged is around £400K, the original home is worth about £25k more than the FHL so £25k would be changing hands, the rest of it would be an equal transfer.
I've done plenty of googling to try and find the answer but have struggled to find any examples of this type of scenario, the one I did find suggested that SDLT would need to be paid on the full value of the transfer so £400k for one party and £425k for the other, minus the £250k allowance obviously.
Is anyone on here experienced with this type of situation and could offer some advice please?
I'm trying to find someone who's knowledgable on SDLT to help with a current situation.
My mum and step dad (unmarried) own equal shares in two properties, one they lived in one they let out as a furnished holiday let.
They've now split up, one of them has remained in the original home and the other has moved into the FHL as they ceased the business in September.
The one living in the original home wishes to move the separation along at pace and fully own the house they're living in, the other party in the FHL has the intention to market it in the Spring and move to another area.
Both parties have paid for tax advice from accountants regarding SDLT, unfortunately the advice differs, one says it will have to be paid, the other says it doesn't.
The value of the shares of each house to be exchanged is around £400K, the original home is worth about £25k more than the FHL so £25k would be changing hands, the rest of it would be an equal transfer.
I've done plenty of googling to try and find the answer but have struggled to find any examples of this type of scenario, the one I did find suggested that SDLT would need to be paid on the full value of the transfer so £400k for one party and £425k for the other, minus the £250k allowance obviously.
Is anyone on here experienced with this type of situation and could offer some advice please?
Always tricky when experts disagree. The devil could well be in the detail. Was there a common briefing document out together that outlines the position and intended course of action? If not it’s possible that one party has a key detail wrong, or an assumption has been made that changes the outcome.
The most straightforward way to resolve the disagreement would be to ask each of the accountants to review comment on the reasoning behind the opinion of the other? Ultimately, if they can’t reach consensus then there will be issues encountered with them handling the transactions. Although there are some very experienced accountants on here, I wouldn’t expect that views from a forum would carry much weight with the paid advisers already engaged, especially if those views aren’t formed with the benefit of knowing the specifics.
An alternative is to go to a third firm and ask them to review, then use their services along with those of the party they agreed with?
The most straightforward way to resolve the disagreement would be to ask each of the accountants to review comment on the reasoning behind the opinion of the other? Ultimately, if they can’t reach consensus then there will be issues encountered with them handling the transactions. Although there are some very experienced accountants on here, I wouldn’t expect that views from a forum would carry much weight with the paid advisers already engaged, especially if those views aren’t formed with the benefit of knowing the specifics.
An alternative is to go to a third firm and ask them to review, then use their services along with those of the party they agreed with?
Unmarried is the key here, which means they are not subject to many of the exemptions made for being such.
Living in the house or not doesn't make any difference to SDLT, that only affects CGT calculations.
So they could gift their 50% share in each property to each other to avoid SDLT falling due on the capital aspect but you can't gift your half of any mortgage, so SDLT will be payable on the value of the half of the mortgage which is taken on from the other partner.
Plenty of useful and relevant advice and examples on this page:
https://www.gov.uk/guidance/sdlt-transferring-owne...
Living in the house or not doesn't make any difference to SDLT, that only affects CGT calculations.
So they could gift their 50% share in each property to each other to avoid SDLT falling due on the capital aspect but you can't gift your half of any mortgage, so SDLT will be payable on the value of the half of the mortgage which is taken on from the other partner.
Plenty of useful and relevant advice and examples on this page:
https://www.gov.uk/guidance/sdlt-transferring-owne...
Edited by AdamV12V on Monday 1st January 12:14
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