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Accountants in Medway - Sinden Thackeray Partnership

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Stamp Duty Help for Family Exchanges

Newsletter issue - April 07.

The rates of Stamp Duty Land Tax (SDLT) were not changed in the Budget. The duty is payable on all homes valued at over £125,000, (or £150,000 in a disadvantaged area), and on all commercial properties valued at over £150,000.

However there was one welcome change for family members who want to exchange properties. Currently when a widowed grandparent living alone in the former family home wants to exchange that large house for a small property currently occupied by her daughter, the total value of both properties is added to together to work out the SDLT rate that will apply.

So where a property worth £300,000 is exchanged for a property worth £220,000, the total value of the properties is £520,000 and the rate of SDLT on both transactions is 4%, giving a SDLT charge of £20,800. After the law is changed in July 2007 there will be a charge at 1% on the acquisition of the property worth £220,000, and a charge at 3% on the acquisition of the property worth £300,000, giving a total SDLT charge for the family of £11,200.

 


Christopher Kember FMAAT is licensed and regulated by AAT under licence number 7213. AAT is recognised by HM Treasury to supervise compliance with the Money Laundering Regulations and Sinden Thackeray Partnership is supervised by AAT in this respect.