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HMRC internal manual

Stamp Duty Land Tax Manual

Scope: How much is chargeable: Non-cash consideration: Assumption or release of a debt FA03/SCH4/PARA8: Examples

Example 1

A property is transferred by V into the ownership of V and P in equal shares subject to a subsisting mortgage.

P assumes liability for all or part of the debt.

Notwithstanding P’s actual liability, which is probably for all of the debt, P is treated as assuming debt equal to 50% of the amount owing.

This is because he is treated as owing none before the transaction and 50% after it.

Example 2

A property is owned by V and P in 70:30 shares.

It is transferred to the sole ownership of P subject to a subsisting mortgage.

Assuming V is released from the debt or P agrees to indemnify V there is an assumption of debt by P.

P is treated as assuming debt equal to 70% of the amount owning.

This is because P is treated as owing 30% before the transfer and 100% after it.

Although new sub-paragraphs (1A) and (1B) take effect from 22 July 2004 HM Revenue & Customs will apply the same practice in dealing with transactions prior to this date.