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HMRC internal manual

Stamp Duty Land Tax Manual

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HM Revenue & Customs
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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 the 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.