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bigduckontax, Accountant
Category: Tax
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Not sure if you can answer questions on SDLT? Here goes

Customer Question

Not sure if you can answer questions on SDLT? Here goes anyway. Wife and Daughter acquired residential property for £150k for Daughter to live in. Now Wife and Daughter intend to sell it for £175k to connected Company (owned by Wife and Husband). Is Company liable to SDLT at 1% of £50k, namely £500?
Submitted: 1 year ago.
Category: Tax
Expert:  bigduckontax replied 1 year ago.

Hello, I am Keith, one of the experts on Just Answer, and pleased to be able to help you with your question.

The company would appear, on the face of it, to be liable to SDLT at 50K at 2% = GBP 1K. However, corporate bodies SDLT does not kick in until 500K and then at 15%. However this does not apply to properties occupied by employees and, remember, that directors are employees per se. This might provide an useful loophole.

I do hope that you find my reply of assistance.

Customer: replied 1 year ago.
Does the answer differ (namely that SDLT is payable by the company at 2% of £50k) the in light of the following additional information: the company is a new one and does not have any other assets except cash of £200k and the property which is worth £175k will be rented to third party tenants going forward in the future.
Expert:  bigduckontax replied 1 year ago.

I am so sorry, I have mislead you. The exact wording of the Gov UK web site is as follows:

'Stamp Duty Land Tax (SDLT) is charged at 15% on residential properties costing more than £500,000 bought by certain corporate bodies - or ‘non-natural persons’. These include:

  • companies
  • partnerships including companies
  • collective investment schemes

These bodies may also need to pay Annual Tax on Enveloped Dwellings.

The 15% rate doesn’t apply to property bought by a company that is acting as a trustee of a settlement or bought by a company to be used for:

  • a property rental business
  • property developers and trader
  • property made available to the public
  • financial institutions acquiring property in the course of lending
  • property occupied by employees
  • farmhouses

The standard residential rate of SDLT applies in these cases.'

So we revert back to my original answer of 500K @ 2% = 1K. Deep apologies for my error.