Stamp Duty Land Tax (SDLT) -
in relation to trust deeds
An SDLT return has to be
submitted where there is a transfer of an interest in land and the
consideration exceeds £40,000. Gifts are not caught by this but remember
that if a property is mortgaged then this will be taken into account e.g. if a
half share in a property is transferred subject to a mortgage then the
presumption is that the person receiving the benefit of the property is also
taking on half of the mortgage debt (of course this presumption could be
rebutted by express words in the declaration)
Scenario 1
Property in sole
name but purchase price contributed to by two people and trust deed declares
it is held for the benefit of them jointly in the shares in which they
contributed - either with or without mortgage
Scenario 2
Property in sole
name of X. Free of mortgage. X gifts a half share to Y and enters into a
declaration of trust to record that the property is now held for X & Y
jointly.
Scenario 3
Property in sole
name of X. Free of mortgage. X transfers a share to Y in consideration of a
payment by Y and enters into a declaration of trust to record that the
property now held for X & Y jointly.
-
If the payment is less than £40,000 then no SDLT return is
required
-
if the payment exceeds £40,000
then an SDLT return is required. No tax is payable though unless the
current threshold is exceeded (£125,000 for residential properties)
Scenario 4
Property in sole
name of X. Subject to a mortgage. X transfers a share to Y in consideration of
a payment by Y and enters into a declaration of trust to record that the
property is now held for X & Y jointly.
-
If the payment plus 50% of the mortgage debt is less than
£40,000 then no SDLT return is required
-
if the payment plus 50% of the mortgage debt exceeds
£40,000 then an SDLT return is required. No tax is payable though unless
the current threshold is exceeded (£125,000 for residential properties)
If it is necessary to complete a return and
submit this to the HM Revenue & Customs then the main form is SDLT1 and sometimes a
supplementary form SDLT4 see HMRC: Stamp
Duty Land Tax. You will see that from the same page you can get
guidance notes.
If you have any concerns about this
you should refer to the HMRC web site at
http://www.hmrc.gov.uk/sdlt/index.htm
or telephone their help line on 0845 603 0135
The above is a very brief summary of the
main SDLT requirements in so far as they might affect a declaration of trust -
if you have any concerns you should should check with HM Revenue & Customs.
The
documents available on this site have been prepared for use in England &
Wales. They may not be valid if used in other areas.
