SDLT - gifts to a family farming partnership

Mum owns farmland and farmhouse - wants to give the same to the family farming partnership of which she and her daughter are the partners

is SDLT payable on the value transferred - my initial research indicates yes because of similar rules re gifts to companies and associated parties - is this correct?

Michael Micklethwait
Beviss & Beckingsale

FA 2003 Sch 15 paras 10 to 12 are in point.

Accordingly, my understanding is that SDLT is due on the proportion of the property transferred to the daughter. “Daughter” is not “connected” to mother [CTA 2010 s1122 & 1123].

SDLT being charged on market value as determined applying the “sum of the lower proportions” [Sch 15 para 12].

Malcolm Finney

s1122(5)(b) CTA 2010 can be paraphrased as saying that an individual (“A”) is connected with another individual (“B”) if A is a relative of B, where “relative” means brother, sister, ancestor or lineal descendant.
As the daughter is a lineal descendant of the mother, the daughter is connected to the mother.
On this basis the SLP in FA 2003 Sch 15 para 10 is 100, so no SDLT is payable (I am assuming from the question that mother and daughter are the only partners).

Care needs to be subsequently taken with regards to withdrawals of capital (not income) from the partnership in the three years following the transfer into the partnership (FA 2003 Sch 15 para 17A), which potentially trigger an SDLT charge at that time (depending upon values).

Carlton Collister
landtax llp

Carlton is quite right.

Why I said mother and daughter are not “connected” is beyond me. Apologies to Michael.

On the other hand, I had eaten an excess of Easter eggs late afternoon…maybe an excess of chocolates befuddles the brain…

Malcolm Finney