I am thinking of buying a flat in London for my daughter who is going to start university in September. If I buy the property in the name of a trust will the trust have to pay normal Stamp Duty Land Tax (SDLT) or will it have to pay the 3% surcharge on top of the normal SDLT. Please advise.
My immediate response is that SDLT is now such a complicated area of tax on a land transaction that buyers should seek independent tax advice from their tax advisor or accountant if your property transaction is even slightly more complicated than a normal standard purchase of property. In your instance the advice would be dependent on the content of the trust document, and how it is worded as to whether you will be liable for the 3% surcharge on top of the usual SDLT or not. It is not cut and dried but is dependent on the wording of the trust document.
After the introduction of the 3% SDLT surcharge in April 2016 HMRC have tweaked a number of regulations and clarified others, and ruled on yet further aspects which were grey and murky areas. The result is that in some instances you may think that you are not liable for the 3% surcharge but in fact you are liable, and should be paying it.
In the Autumn Statement 2015 the government announced that the time limit for filing the SDLT return and paying the tax due would be reduced from 30 days to 14 days during 2017 to 2018. There were a few delays to this implementation but in the Autumn Budget 2017 it was announced that the time limit changes would be implemented with effect form 1 March 2019. You must now submit and pay any land transaction tax due within 14 days after completion of a disposition incurring SDLT.
My advice is to take independent SDLT advice from your tax advisor or accountant prior to making your decision. Please also remember that the time limit for payment of such SDLT is now 14 days only.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.