SDLTM16040 If there is a transfer of freehold, or a grant or assignment of a lease (in Scotland, transfer of ownership or the assignation of a tenant's interest under a lease) and a lease back to the vendor there are two transactions and two 'purchasers'. Each purchaser must complete a separate notification for each transaction, that is one for the transfer of freehold (or the grant or assignment of a lease) and another for the lease back.
SDLTM04020
If there is an exchange of land, where at least one of the interests
in land is a major interest, there are two transactions and two
'purchasers'. Each purchaser must complete a separate notification
for each transaction.
The chargeable consideration for each transaction to be shown at
question 10 is the open market value of the interest in land that
each purchaser receives as a result of the exchange.
Code 37 only should be shown at question 12 regardless of whether any balancing cash payment was made.
Vicky agrees to transfer her house worth £400,000 to Paul. Paul transfers his flat worth £250,000 to Vicky and pays Vicky £150,000. In this case there is certainly an exchange.
Paul as purchaser is required, as part of the consideration for his purchase of Vicky's house, to be the vendor in another land transaction - the transfer of his flat to Vicky. Vicky as purchaser is required, in consideration of her purchase of Paul's flat, to act as vendor in another transaction - the transfer of her house to Paul.
So they are both subject to the exchange rules. Both Vicky and Paul are required to complete SDLT Returns for their respective purchases.
In the same scenario Vicky agrees to transfer her house to Paul who pays her £150,000. Paul transfers his flat to Vicky's friend Sally for nothing. In this case there an exchange has taken place Paul as purchaser is required (by Vicky) to enter into another land transaction as vendor as a result of the transfer to Sally.
SDLTM30100 Transactions are 'linked' if they form part of a single scheme, arrangement or series of transactions between the same vendor and purchaser or, in either case, persons connected with them. Sale (or lease) and lease back or an exchange of land will comprise linked transactions only if between connected persons. See notes on SDLT1 question 13.
SDLTM27020 A scheme to partly buy and partly lease property, usually from a housing association or local authority is known as a 'shared ownership lease'. Over time an increasing share in the property may be acquired. The purchaser elects the way in which stamp duty land tax is calculated and paid.
Detailed guidance on how to make a land transaction return of the grant of a lease of residential property on shared ownership terms and on the acquisition of further interests in the property are not provided in this publication. Instead refer to SDLTM27080.
You do not need to notify transactions where the initial consideration is below the notification threshold. However, if a later contingent consideration is added to the initial consideration it may exceed the notification threshold.
In this case you need to take the following actions: complete SDLT1 and 4 and send them to Netherton along with any payment of tax, write to Birmingham Stamp Office to let them know the UTRN number used please mark the envelope and letter for the attention of the Deferment Section.
If the relevant event(s) take place but the total consideration is still below the notification threshold please inform HMRC in writing within 30 days.
SDLT1
Question 10 - Insert the amount of the initial consideration. This is the amount on which tax is payable now. Question 13 - Put a cross in the 'Yes' box. Enter the total consideration, ie initial consideration and the contingent consideration added together. This will ensure that you pay the correct rate of tax as this is determined by the threshold in which this total falls.
SDLT4
You do not need to complete SDLT4 if the only reason for completing it is to answer the questions about contingent consideration/application for deferment - questions 4 and 5. If you need to complete SDLT4 for any other reason you should answer questions 4 and 5 at the same time.
Where to send the SDLT 1 AND SDLT 4 in deferment cases
Please send the completed SDLT1 and 4 to Netherton not to Birmingham
Contact details for sending a payment to Netherton
Please also complete a UTRN notification slip and send it to Birmingham Stamp Office. This ensures that the computer record is tied in with our manual deferment papers and helps improve our service to you. UTRN notification slips can be obtained from Birmingham Stamp Office.
