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Aston Lawyer
Aston Lawyer, Solicitor
Category: Law
Satisfied Customers: 10543
Experience:  Solicitor LLB (Hons) 23 years of experience in Conveyancing and Property Law
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I wonder if you can clarify in regard to selling a Cottage

Resolved Question:

I wonder if you can clarify in regard to selling a Cottage at the threshold of £250k and to then enter into a Put and Call Option for the party to acquire extra land from me within a period of 12-24 months in an amount of say £10k.

I have had several enquiries for the availability of extra land adjoining the Cottage and as such it seems that if the purchaser had the opportunity to buy some additional land in the future in order to expand the cottage garden would this constitute a separate sale by granting a Licence on the extra land linked to an Option as referred to above and would this therefore be exempt from Stamp Duty in the future? Or would it still be treated by the Revenue as one sale all be it sometime later when the Licence is converted into a sale agreement to purchase the additional land some time after buying the Cottage?
Submitted: 3 years ago.
Category: Law
Expert:  Aston Lawyer replied 3 years ago.
Hello and thanks for using Just Answer.

My name is ***** ***** am happy to assist you with your enquiry.

For Stamp Duty purposes, a Buyers Solicitor has to declare to HMRC if any purchase is "part of a larger transaction" or if there is a 2linked transaction".

Therefore, if the Sale of the Cottage is conditional on the Buyer being granted a Licence to occupy the additional land, and/or an Option to purchase this additional land at a later date, it certainly would be classed as a linked transaction, and SDLT would be payable on the aggregate consideration and hence at 3%.

If you did therefore enter into type of agreement to sell the additional land at a later date, I am afraid there is no way your Purchaser can avoid the SDLT on an aggregate basis.

I hope this answers your question, but please let me know if you require any further clarification.

Kind Regards
AL
Customer: replied 3 years ago.

Thanks Al


If I just granted an arms length Licence to occupy the land for say 5 years with a break clause in the 2nd and 5th year would this work so we can on the break either ask them to vacate or they can at the time of serving notice to vacate request I sell the land but that would not arise if they did not want to continue to rent/occupy the land and in the meantime I charge say a commercial rent of £1500 per annum

Expert:  Aston Lawyer replied 3 years ago.

Hi Penny,

Thanks for your reply.

I'm afraid that your proposal would still be classed as a "linked transaction" and would fall foul of aggregate SDLT at the time the land is purchased.

Sorry.

Kind Regards
AL

Aston Lawyer and other Law Specialists are ready to help you
Customer: replied 3 years ago.

Many thanks


 


Penny