Where an estate is to be divided between two beneficiaries A and B in equal shares and the estates consists of, say, a property worth £200,000 and cash residue of £100,000, would SDLT be chargeable if A and B enter into a Deed of Variation by which A receives the property charged with a payment of £50,000 to B, and B receives the residue?
I am looking at Sched 3, para 4 FA 2003 which provides an exemption for DoVs so long as “no consideration in money or money’s worth other than the making of a variation of another such disposition is given for it.” At SDLTM00560 this is followed by “N.B. consideration here does not include any secured debt assumed.”
Will this legacy charged on the property be considered external consideration? It is not the assumption of “existing debt” by A (Sched 4, para 8). After all, if the property were sold the beneficiaries would still receive an equal amount of cash from the estate.
Would a DoV even be required or make any difference to the outcome? A and B are still receiving equal value under this arrangement so, as long as both beneficiaries are in agreement, the executors could transfer the property to A subject to the debt to B without needing to amend the Will.