If you transfer or divide up jointly-owned property or land: unmarried couples and other joint owners
You don’t pay SDLT if 2 or more people jointly own property and you divide it physically and equally and own each part separately. But, if one person takes a bigger share, or all of the other’s share, and pays cash or some other consideration in exchange, you must tell HMRC. If the amount you pay is more than the current threshold, you’ll pay SDLT on it.
If you transfer the outstanding mortgage
Joint owners (this may include unmarried couples who are splitting up) may agree that just one of them will take over ownership of a property they bought together, including any outstanding mortgage.
In this case the person taking ownership will pay SDLT on the total chargeable consideration of the following (either or both), if it exceeds the SDLT threshold:
· any cash payment that one of the couple makes to the other for their share
· the proportion of the outstanding mortgage that belongs to the share of the property being transferred
If you transfer land or property to or from a company
When property is transferred to a company, SDLT may be payable on its market value, not the consideration given.
This applies in either of the following situations, the:
· person who transfers the property is ‘connected’ with the company – the definition of a connected person covers relatives and people who have some involvement with the company
· company pays for the property with shares in the company (partly or wholly) to the person making the transfer, where that person is connected to the company (but not necessarily the acquiring company)
SDLT transactions that count as linked
When 2 or more property transactions involve the same buyer and seller, they count as ‘linked’ for SDLT. HMRC may count people connected to a buyer or seller as being the same buyer or seller.
If 2 or more transactions are treated as linked, then the buyer pays any SDLT due on the total value of all linked transactions. This may mean that they pay a higher rate of SDLT than if the transactions are counted individually.
HMRC counts transactions as linked if:
· there’s more than one transaction
· the transactions are between the same buyer and seller or between people connected with either of them
· the transactions are part of a single arrangement or scheme or part of a series of transactions
A connected person could be your relative, for example your brother, sister, parent, grandparent, husband, wife or civil partner – or one of their relatives.
If the buyer or seller is a business, a connected person would be a business partner and their relatives. It also includes companies and groups of companies who are connected to the business.
Transactions linked as part of a single arrangement
Some transactions are linked because they’re part of the same single arrangement or scheme. It’s the same whether you document them separately or not. If each transaction has a separate contract, and if the sales are part of the same deal, they count as linked for SDLT.
If you sell a residential property in such a way that one person buys the house but their relative buys the garden, the 2 transactions are linked. They’re connected people and they’re buying things from the same seller as part of a single deal.
Because the 2 transactions are linked, calculate the amount of tax due on the total chargeable consideration for all the transactions. Then, apportion this amount between the transactions in proportion to their share of the total chargeable consideration.
Transactions linked as part of a series of transactions
When a sale is followed by one or more related sales, if there’s something to link all the transactions together, they count as linked transactions for SDLT. There’s no limit to the length of time between the transactions.
This could be the case if for example someone buys 3 houses from the same builder in 3 completely separate transactions with:
· no prior agreement or option
· no special price or discount
· anything else to link them