SDLTM00570A - Scope: What is chargeable: Assents and appropriations by personal representatives FA03/SCH3/PARA3A: examples
Example 1
A mortgage-free property is left to B in T’s will, a specific bequest.
The assent by which the property is transferred to B is exempt from Stamp Duty Land Tax (SDLT).
Example 2
T leaves B £500,000, a pecuniary legacy.
B accepts a mortgage-free property worth £300,000 in part satisfaction of this legacy, an appropriation.
The assent by which the property is transferred to B is exempt from SDLT.
Example 3
The facts are the same as in examples 1 or 2 except that the property was subject to a mortgage of £100,000, which was not paid off on death.
The transaction is exempt from SDLT.
Example 4
T’s will leaves £250,000 to trustees of a discretionary trust and the remainder, the residue, to B.
On death the only asset is a property. It does not matter whether at death the property was mortgage-free or whether there was a mortgage which was not paid off on death.
B takes the whole property and the legacy to the trustees is satisfied by an acknowledgement by B that he is indebted to the trustees for £250,000.
This acknowledgement is money’s worth of £250,000 and so B has given chargeable consideration of £250,000 upon which SDLT will be charged.
Example 5
The facts are the same as in example 4 but the acknowledgement of indebtedness is given by T’s executors, and the property is then transferred to B with B assuming liability for the indebtedness.
B has given chargeable consideration of £250,000 by virtue of FA03/SCH4/PARA8 upon which SDLT will be charged.
Example 6
The facts are the same as in example 4 except that instead of acknowledging indebtedness B charges the property with payment of £250,000.
The charge provides that the sole right of recourse for the trustees is against the property.
This is money’s worth and so B has given chargeable consideration of £250,000 upon which SDLT will be charged.