Protective Life Interest Trust / Additional 3% SDLT


#1

Does a protective life interest trust pay the additional 3% SDLT as a purchaser?

Toby Fountaine
Parfitt Cresswell


(Lucy Orrow) #2

http://www.mills-reeve.com/a-question-of-trust-sdlt-surcharge/
useful article on google
Lucy Orrow
Universal Wealth Preservation


(Paul Saunders) #3

If the protective trust has not been triggered as at the date of
purchase then, yes.

If the protective trust has been triggered, so that it is discretionary,
then, no.

In either case the 3% additional SDLT will be payable if other
qualifying priority is held subject to the same trust (or by the income
beneficiary).

Paul Saunders


(Andrew M Mortimer) #4

SDLT is not my area and I’ve not looked into this matter in any detail but
since the ‘protection’ only comes into force when an event happens and
until this occurs it is a ‘normal’ life interest interest in possession
trust I would have thought that provided the life tenant does not already
have a dwelling the additional 3% SDLT would not apply.

However, I stand to be corrected!

Andrew M Mortimer


(Andrew M Mortimer) #5

SDLT is not really my area and I’ve not looked into this matter in any
great detail but since the ‘protection’ only comes into force when an event
happens and until this occurs it is a ‘normal’ life interest interest in
possession trust I would have thought that provided the life tenant does
not already have a dwelling the additional 3% SDLT would not apply.

However, I stand to be corrected!

Andrew M Mortimer


(Elizabeth Mullaney) #6

Surely yes - if it results in two homes being owned!
Lizzie Mullaney
Gaby Hardwicke


(malcfinney1) #7

Under paras 10 and 11 Sch 4ZA FA 2003 the beneficiary (not trustees) will be treated as the purchaser of the dwelling if under the terms of the settlement the beneficiary is entitled to occupy the dwelling (or income earned in respect of the dwelling) and will also be treated as holding the interest in the dwelling.

If the beneficiary does not already possess a major interest in another dwelling then irrespective of whether the protective trust mechanism has been triggered or not, the 3% SDLT charge will not apply (unless, if it has been triggered, the trustees as purchasers already have a major interest in another dwelling).

If the beneficiary does possess an interest (in another dwelling) then the 3% charge applies but only if the protective trust mechanism has not been triggered as at the date of “completion” of the purchase.

Malcolm Finney