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SDLT Additional Rate

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William Chalk

Posted on:
02/05/17 15:22
Subject: SDLT Additional Rate

In the following scenario, do readers feel the transaction could be caught by Additional Rate SDLT?
Mother, who already owns a residence, wants to gift cash funds to her son and daughter equally for IHT mitigation. Mother wishes son and daughter to use the funds to purchase a property. Daughter already owns a property but son does not. If son receives the gifted funds and purchases the property in his name, can he then simply gift a half share to his sister (whether by legal transfer or declaration of trust) without the arrangement being caught by Additional Rate SDLT? Son would of course be making a PET for IHT purposes and a disposal for CGT. Any thoughts would be much appreciated.
Many thanks
Patrick

Posted on:
31/05/17 17:24
Subject: RE: SDLT Additional Rate

William, it looks like s75A could apply to charge SDLT on second sibling on half the total consideration given for the original purchase at the 3% additional rates, but with a credit for half the SDLT paid at normal rates by the first sibling on the original purchase so may not be fair for the first sibling.
Justin Bryant

Posted on:
02/06/17 12:20
Subject: RE: SDLT Additional Rate

Yes; the son would have to have discretion to make an autonomous decision per the link below I expect:

https://www.kingsleynapley.co.uk/comment/blogs/private-client-law-blog/tax-a-successful-flip-flop

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