Application: Deemed market value: Example 1
An individual, A, transfers freehold residential property to company B, for consideration of £170,000.
SDLT considerations are:
Is A connected to B in accordance with S1122CTA10?
If so, what is the market value of the property transferred?
If A is not connected to B the chargeable consideration will be the amount paid, £170,000 at the rate applicable for residential property at the effective date of the transaction.
If A is connected to B S53 applies and the chargeable consideration for the transaction may be the market value of the property at the effective date. If this were £275,000 this would be the chargeable amount, if however the market value were only £150,000 the chargeable consideration would be £170,000, chargeable at the appropriate rate.