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With over five decades’ experience serving a diverse range of clients in the South West, we possess an unbeatable depth of knowledge across a wide range of industry sectors.
Our specialist partners and teams can provide expert advice on everything from farming and agriculture, to military tax allowances. We’re here to help you make the most of your planning opportunities so that you can grow with confidence.
Stamp duty land tax (SDLT) has become increasingly complex and expensive over the years. Getting the position wrong, whether by paying too much, or by paying too little initially and getting caught out, is even more costly. As recent media coverage has highlighted, even Government ministers have made mistakes with their SDLT.
We regularly see clients being advised their purchase of a new home is subject to the higher rates of SDLT (now meaning an extra 5% charge) because they own an interest in another property. That advice is sometimes correct, but the higher rates should never be payable where the new purchase qualifies as the replacement of a previous main residence, regardless of any other dwellings that are owned.
Farmers often encounter challenging situations such as:
Is it clearly a residential purchase, or does it include sufficient other elements (such as farmland or business premises) to qualify for the non-residential/mixed use rates?
Does the purchaser already own an interest in another dwelling on the farm (or elsewhere)?
Is the purchaser a beneficiary of a family trust that owns residential property?
Is property being transferred into or out of a family partnership by or to one or more of the partners?
Are family members looking to divide the ownership of family assets so individual family members will own specific properties outright?
Are there loans secured against the property being transferred?
Are there multiple residences being acquired, which could include self - contained annexes? Following the abolition of multiple dwellings relief this can result in a significant increase in the SDLT liability particularly where this triggers the higher SDLT rates applying. Multiple residences will not necessarily prevent the standard rates applying if the secondary dwellings are subsidiaries of the main house.
Often, on a purchase, there may be limited opportunity to structure the transaction to mitigate an SDLT liability. Nevertheless, the SDLT position on a planned purchase should be considered in advance to ensure the correct SDLT liability is paid and any evidence to support the position is obtained and retained. Where the SDLT is significant, wider planning with regards other residential property owned by the purchaser can be considered.
Where transactions are taking place within the family, there is more flexibility to ensure tax liabilities are mitigated, whether in relation to the current transaction, or to help protect the position for a future acquisition.
Simpkins Edwards have advisers who provide specialist SDLT advice so please get in contact if you are considering a property purchase or believe you may have overpaid SDLT on a recent acquisition.