SDLT first time buyers relief

Trusts Discussion
1

Has anyone got an answer to whether inheriting a share of a house under a Will disqualifies you from first time buyer relief-and whether the answer is different if the house is sold by the executor during the administration period?

My research comes up with different answers depending where I look.

Hmrc FAQs to their guidance notes on the budget say if you inherited a property, or an equitable interest in one, you are not a first time buyer.

The definition in the guidance also says if you inherit that disqualifies you.

PLC says the opposite, but I do not think this has been updated since the Finance Bill was published and seems rather oddly worded.

The Finance bill defines a first time buyer as someone who has not previously been a “purchaser” in relation to a land transaction…or has not “acquired” an interest in a dwelling outside England and Wales.

So lots of inconsistencies and no real certainty until we have an Act. I suppose the best advice is a sale during administration, in the hope this is not treated as an equitable interest for these purposes, as a belt and braces, but then the Finance Bill seems to suggest there is no problem anyway?

Simon Northcott

2

I would have thought that if at “completion” of a purchase the purchaser had already “inherited” a major interest in another property first time buyer relief would not be available.

As to whether an “inheritance” of a major interest has arisen presumably this is determined by ascertaining whether at the time of completion of the purchase the purchaser had acquired a beneficial interest in the inherited property. This would not be the case if at that time the estate remained unadministered and no assent had previously been made. Once an assent is made or the period of administration ends a beneficial interest would arise.

This would seem consistent with the approach adopted with respect to the 3% charge which assumes an inherited property would be taken into account and so the legislation then provides for a specific exception allowing an inherited property to be ignored for a period of time [Sch 4ZA para 15].

Malcolm Finney