SDLT consequences of gift of properties to a company

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“My enquiry concerns 2 properties. My client is transferring some properties into his company. If he transfers for nil consideration, for whatever reason, then of course there will be no SDLT.

The 2 properties are a commercial property valued at £150,000 – no option to tax in place and a residential property valued at £95,000. The commercial property, and is therefore just under threshold for SDLT on a commercial property.

The residential property is below the £125k residential threshold, but as it is a company acquiring residential property they will go straight to pay the 3% rate on this.

My query is down to the consideration of linked transactions. Are these linked transactions ? If I combine the value for the two, how do I go about applying the commercial and the higher residential SDLT rates, presumably somehow proportionately to both?”

Source: BLG Member 


As the company is connected with the vendor the market value rule will apply.  The transactions will be linked.  The 3% additional rate will not apply as the ‘relevant land’ (land an interest in which is the main subject-matter of any of the linked transactions) is not entirely residential and the total consideration will, for the same reason, be taxed as in Table B – £245,000 – £150,000 = £95,000 x 2%.

I would suggest that you use a single SDLT return.

At the time of publication this response was correct however as tax legislation and practice change from time-to-time you should take specific advice before taking any action.

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