Stamp Duty Land Tax (SDLT) – Probate Properties

One of the biggest hurdles in these climates for businesses in property development is the Stamp Duty Land Tax (SDLT) payable on the purchase. However, there are reliefs that are available in relation to specific types of property such as probate properties whereby SDLT can be potentially avoided.

Where a property trader purchases a dwelling from the personal representatives of a deceased individual, the purchase will be exempt from SDLT if all the following conditions are met:

  • The purchase is in the course of a business that consists of purchasing dwellings from the personal representatives of deceased individuals
  • The deceased individual occupied the dwelling as his main or only residence at some time in the two years ending with the date of their death and
  • The area of land acquired does not exceed the permitted area – Permitted area being 10,000sqm

Where the land acquired is more than the permitted area, as long as the first two conditions above are fulfilled, partial relief may be claimed. Where partial relief is claimed, part of the consideration for the acquisition becomes chargeable.

The amount of chargeable consideration is the difference between the market value of the permitted area, that is the old dwelling and grounds allowed, and the total market value of the old dwelling including all the land.

Relief under this section will be withdrawn if the property trader:

  • Spends more than the permitted amount on the refurbishment of the dwelling (permitted amount being up to £10,000) or
  • Grants a lease or licence of the dwelling or
  • Permits any of its principals or employees, or any person connected with any of its principals or employees, to occupy the dwelling

If you want to look into whether you are able to make a relief claim or discuss other options, please do get in touch and we are happy to assist.

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