If a beneficiary decides to “buy out” another beneficiary’s share of a property within an estate and keep the property as part of their entitlement, is it subject to SDLT?
Martyn Dixon
Harold Bell & Co.
Yes
Simon Northcott
If the beneficiary receives a share of the property in satisfaction of their own entitlement, I understand SDLT is due, but only on the consideration paid to the other beneficiaries (i.e. the equality money).
The situation should be set out in the transfer and SDLT forms submitted, with the consideration paid being clearly highlighted.
Notwithstanding the cash consideration, the beneficiary will take at the date of death value (as confirmed by the Court of Appeal in Passant v. Jackson [1986]).
Paul Saunders
I think the clue is the words “buy out” - consideration is passing therefore SDLT may (depending on amount) be payable by the buyer.
Simon Leney
Cripps LLP
My understanding is always helped by an example. If an estate comprises some assets and property. The estate is split say three ways.
Property £300K Other assets £150K.
Providing that the STEP Standard Provisions have been incorporated, Clause 4.15 permit the PRs to appropriate thus overcoming the requirement in S41 AEA 1925 for consent.
Thus the only part subject to SDLT in this example is the additional consideration as stated by the other contributors. £150K
Adrian Traher
Civil Wills