I am preparing an SDLT advice for two brothers who are purchasing their first UK property, and are both UK resident. They each have a ‘bare ownership’ interest in properties gifted in Greece, whereby their father holds the usufruct interest in his lifetime, and there is a successive usufruct interest for his wife / the clients’ mother on the father’s death. Therefore my clients can only benefit from their bare interest in the event that both their parents die. They can transfer their bare ownership interest before then, but only to one another/direct descendants and only with their father’s (or mother’s, if relevant) consent.
My understanding is that my clients do not need to pay the HRAD surcharge as their interest in the Greek properties does not qualify as a major interest. It is their father who holds the usufruct rights in his lifetime and therefore he who shall be taxed on the beneficial ownership of the property, such that if he was to purchase a UK property then he would be subject to the HRAD surcharge.
I would appreciate others thoughts on this and direction to any commentary that discuss this point as I am struggling to find anything.