SDLT - inherited estate property not yet assented and beneficiary seeking to move/second property charge

I have an estate where the assets have all been ascertained and distributed apart from a property. The intention is for the property to be sold so it has not been assented. However – it is now four years on and the property isn’t even on the market yet.

One of the PR’s wants to step down from acting (age/ill health). The simplest way for him to step down would be to assent the property to the four residuary beneficiaries and then job done.

However, one of the beneficiaries is seeking to move house and is concerned that they will then have to pay the additional SDLT 3% rate due to then having an interest in another property. I am of the view that seeing as the estate is essentially settled (but for the property being assented) the beneficiaries have rights over the residential property and therefore the additional SDLT charge would apply irrespective of the date of assent.

I would be delighted if someone could please tell me if I am wrong. Any takers?

Elizabeth Foggin
Autumn Years Law

Could the beneficiary avoid the additional rate for failure to meet Condition D “that the purchased dwelling is not a replacement for the purchaser’s only or main residence.” (FA 2003 Sch 4ZA para. 3(5)-(6)?

Failing that, could the exception for jointly inherited property under para 16 not apply? It reads to me as if the 3 year period of relief only starts once the beneficiary has received an actual interest in the property (" the acquisition of an interest in or towards satisfaction of an entitlement under or in relation to the will of a deceased person, or on the intestacy of a deceased person") although I could be wrong on this.

Andrew Goodman
Osborne Clarke LLP

It seems arguable that the administration of the estate has been completed (residue has been ascertained) in which case the executors will be holding the property as bare trustees for the beneficiaries. In which case the beneficiaries each have a beneficial interest in the property. An assent of an equitable interest does not need to be in writing and may be implied by conduct.

Even if the beneficiary concerned does not have a major interest in a dwelling other than that acquired under the will first time buyer relief will not apply on the proposed new purchase.

If the beneficiary concerned does have a major interest in a dwelling ranking as an only or main residence then despite the inheritance, relief from the 3% SDLT charge should in principle apply if the proposed new purchase is a replacement for the disposal of the current only or main residence; assuming the major interest in the inherited property was acquired less than 3 years ago (Such 4ZA para 15). However, it seems likely that inheritance may have been acquired in excess of 3 years ago.

Malcolm Finney

Apologies re my above post.

Ignore the last piece after the semi-colon ie

Replacement of a main residence with another such residence avoids the 3% SDLT charge even if (as in he above case) the purchase also owns an inherited property.

Malcolm Finney