Stamp Duty query and related gift

Trusts Discussion
1

I have been advising H&W re: Wills and Estate Planning.

H&W own their main residence (£500K) and another prop nearby, which their son lives in. H&W total estates approx £2m.

After our meeting, they are looking at gifting their main residence to their son with him moving in. They will move to the other prop, so no CGT.

Their idea is the son then raises a £250K loan against the property to pay this to his sister so a gift from him. They believe this will get round SDLT. Would this be caught under any kind of related transaction as the gift to the son is conditional on him raising £250K against the gifted property to give to his sister.

My initial advice was he raises £250K as a mortgage to pay his parents, the other £250K prop value is a gift to son and his parents then gift the cash to their daughter.

Thoughts welcome as always.

2

If the daughter does not already have a property of her own, an alternative could perhaps be to gift it to them both equally and then son raises 250k to buy his sister out?

3

I may be overly conservative but it does sound a lot like consideration

1 Like
4

Yup…pretty much the same way I am leaning…thanks Andrew