What are the SDLT consequences of inheriting a one sixth share in a dwelling and purchasing the remainder?

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“Mother has died intestate leaving two properties with total estimated value of about £1.6 million, to be shared between six daughters.

One of the sisters (Sister A) wants to ‘buy’ one property and another sister (Sister B) wants to buy the other. A and B are also the appointed administrators.

Sister A and her husband own an existing property as their home.  The property Sister A wants to buy is worth £1.1. million (each of the six sisters’ share is therefore valued at £183,300).  Sister A and her husband intend to sell their existing main property to acquire this property, but it may not be the case and there is a possibility that they could for a short period own two properties at the same time.

If the other five sisters agree to the transfer of property to Sister A and her husband what SDLT will they pay and on what value?”

Source: BLG Member


The acquisition of property by a person in or towards satisfaction of his entitlement under or in relation to the will of a deceased person or on intestacy is exempt from the charge to SDLT.  Assuming that Sister A and her husband will pay market value for the five-sixths of the property Sister A is not entitled to, the SDLT charge will therefore be on that figure.

The 3% surcharge on the acquisition of additional dwellings will apply if Sister A and her husband still own their existing home when they acquire the new property.  If the new property ‘becomes’ a replacement for the couple’s only or main residence the SDLT surcharge can be reclaimed using an online form available here.

A dwelling becomes a replacement for an individual’s only or main residence if:

(1)  On the day of completion of the purchase of that dwelling (‘Completion’) the purchaser intended it to be his only or main residence;

(2)  Within the three year period beginning the day after Completion the purchaser or his spouse disposes of a major interest in another dwelling; and

(3)  At any time during the three years ending with Completion the dwelling referred to in (2) was the purchaser’s only or main residence.

The tests must be satisfied in relation to  each member of a married couple.

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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