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Home Forums Patrick Cannon Can the use of a bare trustee avoid the 3% additional rate of SDLT? Reply To: Can the use of a bare trustee avoid the 3% additional rate of SDLT?

#895
Gareth Bertram
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Good afternoon and Happy New Year.

The trust deed was executed on the day of purchase as is always the case for my company. We have undertaken purchases using bare trusts for 4/5 years and the flow of funds follow the path you have noted. My company has financial reasons for purchasing in this manner and the properties acquired are always shown on the balance sheet as reported in the annual accounts.

I believed that HMRC were paid the wrong amount of stamp duty by my conveyancer and correspondence including documentation that I provided late last year resulted in a repayment of the SDLT tax back to my company, not me as an individual.

The new and recent correspondence from HMRC states that the purchaser was me as an individual not the company so I believe that they are questioning the use of the bare trust based on sight of the contract for purchase which lists me the individual as the purchaser.

I understand that SDLT is due ‘at the end of the day’ not the time that the contract is completed. I can therefore execute a Bare Trust after the purchase has taken place which transfers the absolute title and all income to the beneficiary which in this instance is my company on the same day. Is this interpretation correct?

Thank you.