General tax question – but perhaps relevance to SDLT
Freehold owner of property contracts to sell to a third party. Completion by way of transfer set for 125 years time! Price (lot less than MV) paid soon after exchange.
Question – what interest passes to buyer? Is it the entire beneficial ownership (when price paid in full) or something less? Jerome v Kelly seems to point towards latter where no specific performance available to buyer. Also – is there a disposal for CGT?
This is an unusual situation with the buyer having paid in full despite the long wait until completion. The basic analysis in Jerome v Kelly applies and assuming that the seller remains entitled to the enjoyment of the land and any rents arising then the beneficial ownership is split mostly in favour of the seller for the time being. It is probably best to look at this as more of a contractual matter in terms of the sale contract rather than in terms of beneficial ownership which tends to obscure the position. Date of disposal is the contract date assuming that this is not a conditional contract.