A special exemption in relation to Stamp Duty Land Tax is available for specific residential purchases by any lawyers on behalf of a buyer. This applies to company’s or partnerships who carry out the business of buying and selling properties

Special exemption when buying property from a deceased estate, no SDLT is due if ALL of the following conditions are met:

  1. Acquisition is made in course of a business that consists of or includes acquiring dwellings from personal representatives of deceased individuals
  2. Deceased individual occupied the dwelling as their only or main residence at some time in the period of their last two years
  3. The property trader does not intend to spend more than the permitted amount on refurbishment of dwelling, or grant a lease or license of the dwelling, or permit any of its directors / employees to occupy the dwelling and;
  4. the area of land acquired does not exceed the permitted area

Condition A:

will depend on the type of buyer – the main course of business should be buying properties in probate with a view of refurbishing them and selling them on.

Condition B:

this fact needs to be ascertained by the purchaser.

Condition C:

Permitted amount is £10k, or up to 5% of price paid for acquisition – whichever is greater, but up to a maximum amount of £20k. The refurbishment of a property includes carrying our works that enhance its value but does not include cleaning or work to ensure meets safety standards.

Condition D:

Permitted area of the property will be half a hectare (5000 sqm), or a larger area necessary for the reasonable enjoyment of the dwelling considering its size and character. If the property purchased is more than the permitted area, as long as other conditions are met, partial relief may be claimed.

The buyer can claim this exemption via their stamp duty land tax return. The buyer must also be aware that the SDLT relief may be withdrawn and clawed back by HMRC if:

  • They spend more than the permitted amount on refurbishing the dwelling
  • They grant a lease or licence of the dwelling
  • Allows any of its principals or employees to occupy the dwelling

If you have any further questions regarding the property trader exemption, please do not hesitate to contact us at Signature Tax and we’d be happy to help.

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