Stamp Duty

[fourtyniner]

a friend of mine has posed this real question.

His house and grounds have got too big for him as he is getting on. His son's is much more manageable. So, no money involved they just want to swap properties, legally registered etc.. Is there any stamp duty involved. and if there is, is it on one or both properties

[kags]

I am afraid that Stamp Duty Land Tax would be payable on the full value of each house - valuations would be required, and these would need to be done very carefully where a property was near one of the thresholds. This could prove very expensive, but careful consideration should be given to the potential Inheritance tax position as well - I would recommend getting prefessional advice if there is a lot of money involved.

[Golden Shred]

The people at the SDLT office are a helpful bunch so if you want a horses-mouth opinion telephone [phone] and talk the proposition over with them.

[jmahdavi]

why bother swapping houses with the land registry.

As they are father and son is there any need. They could just swap which property they live in, technically being tennents of the other's property, but living there rent free.

I assume they could even draw up an agreement confirming this.

[undercovers]

jmahdavi - they could - but if the father wanted to leave the larger house to the son when he dies then massive inheritance tax would kick in, it is better to sort it all out a now (any gift made to the son would be exempt the tax as long as the father survives 7 years post gift).

I too think that you need proper professional advice, and when dealing with a matter of this kind it would be money VERY well spent, but i would imagin that an absolute gift of the large house to the son and a gift of the smaller house to the father may well avoid stamp duty as no actual sale is taking place... i am only guess though, so get to the solicitors (they usually give you half an hour free to get a feel for the problem)

good luck