Property exchange between trusts and SDLT

Trusts Discussion
1

A husband and wife made mirror wills each giving the NRB to a discretionary trust. The spouses are now deceased and I am administering both of the trusts. The trusts have the same trustees and the same classes of beneficiaries.

Each trust contains a rental property, but one of the properties is tenanted and the other is empty. For complicated reasons that do not need to be set out here, it would be useful to swap the properties between the trusts (the properties have identical market values).

Would that property exchange create an SDLT charge?

Jane Whitfield
Barrett & Co

2

We’ve got a similar issue at present where a brother and sister each have a 5% stake in the others homes. They now want to swap those stakes - we take the view that each will be transferring an interest for consideration, so each will in principle give rise to an SDLT occasion of charge (though in our case its probably academic because values will fall below the SDLT threshold)

So my view Jane is that it will give rise to an SDLT occasion of charge

Simon Leney
Cripps LLP

3

And you need to consider cgt, although I believe there is a form of roll over relief that may apply.

Simon Northcott

4

Doesn’t FA 2003 s47 and Sch 4 para5 provide that SDLT would be chargeable?

Malcolm Finney