SDLT relief for property traders buying from estates

Property developers and traders acquiring residential property from the estates of deceased individuals may be able to benefit from a valuable Stamp Duty Land Tax (SDLT) relief. Where the relief applies, SDLT can be significantly reduced or eliminated, helping to facilitate the transfer of inherited property back into the housing market.  The relief is available when a qualifying property trader purchases a dwelling from the personal representatives of a deceased person. It is intended to support genuine trading activities by reducing the tax burden on acquisitions made for resale rather than long-term investment.

To qualify for the relief, several conditions must be met. The property must have been occupied by the deceased as their only or main residence at some point during the two years before death. The purchaser must be a qualifying property trader, generally a company, LLP or corporate partnership, and must acquire the property as part of that business.

There are restrictions on the trader’s intended use of the property. Refurbishment expenditure must not exceed the permitted limit, which is broadly the higher of £10,000 or 5% of the purchase price, subject to a maximum of £20,000. In addition, the trader must not intend to let the property, permit occupation by connected persons, or acquire land in excess of the permitted area, generally 0.5 hectares.

Where the qualifying conditions are not satisfied, SDLT will generally be payable at the normal residential rates, including any applicable surcharges. Given the detailed statutory requirements, it is important to review each transaction carefully before relying on the relief. Professional advice can help ensure eligibility is correctly assessed, SDLT returns are completed accurately, and any opportunities for tax-efficient structuring are identified at an early stage.

If you have any questions about SDLT please get in touch with Steven Martin by using the details below.