Does the 3% SDLT surcharge apply to a purchase by bare trustees?
3% Additional Rate, Bare Trust, Major Interest
“We are acting for A, B, C and D on the purchase of a dwelling. C and D are only going on the title as it’s a requirement of the lender (due to lack of guarantor mortgages) but are to have no beneficial interest in the property. If a trust deed is entered into by A, B, C and D declaring that they hold the property on trust for A and B would the 3% surcharge be payable on the purchase by A, B, C and D if C and D own another dwelling?”
Source: BLG Member
Where there is a bare trust the beneficiaries (and not the trustees) are treated as the purchasers for the purposes of the 3% surcharge. The fact that C and D are on the legal title at the insistence of the mortgagee does not give them a major interest in the dwelling so provided that neither A nor B have such an interest in another dwelling the surcharge will not apply to the purchase.
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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