Deceased died 4 years ago with his only assets being ½ share of property, some shares and a vehicle. All well below the NRB. Within the two-year period the family formally transferred the shares and car to the surviving spouse but did nothing with the property because they didn’t realise anything needed to be done.
It is now outside the two year period to ‘write back’ for IHT/CGT purposes. My view is the grant needs obtaining and the ½ share of the property being dealt with. If, when the grant gets issued, the surviving spouse gives an IOU to the trust in respective of the value of the deceased’s share of the property and the debt secured on the property it will trigger a stamp duty return obligation. So, I am querying when ‘substantial performance’ would have deemed to have taken effect for the purposes of the stamp duty return.
If it is regarded when the debt agreement is entered into it is below the threshold for the Stamp Duty thanks to the current Stamp Duty holiday window, so no stamp duty payable and no late return being filed because it would be done the same time as the debt agreement.
However, would HMRC regard ‘substantial performance’ has having taken place at an earlier date? (making fines/penalties for late filing and no stamp duty holiday being applicable).
The surviving spouse is entitled to occupy the property under a different interest (that as co-owner [SDLTM07900]) and therefore has been in occupation throughout, so I am wondering if could it be successfully argued that there has been no change to her status/occupation throughout and the substantial performance only took effect when the Grant has been obtained and Debt agreement entered into?
Just wondering if I am overthinking it or if there is an obvious elephant in the room that I am missing?