Paying SDLT twice just to grant myself a lease

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    Paying SDLT twice just to grant myself a lease

    Hi all

    I seem to spend my life moaning about SDLT ... apologies, but here I go again.

    Bought a freehold property at auction in my sole name.
    The property is legally split into 3 flats but no leases were formed so still a single freehold.
    £1M price. £650k of that is a Bridging Loan.
    With Multiple Dwellings Relief £50k SDLT paid .
    I'm redeveloping the flats. Combining the two smaller flats, so that the final total will be 2 flats.
    I'm busting a gut on the renovation work on the top flat to finish it first and then I want to move into the top flat myself and take out a personal mortgage, this will pay off a large part of the Bridging Loan, which will be nice as the interest is currently £5715 a month. The Bridging Loan company will then have security over the Lower Flat. This Lower Flat will be finished 3 months later and sold.

    The problem is that I 'simply' want to grant leases so that I can get a personal mortgage on the Upper Flat asap and sell the Lower Flat when it is ready. The solicitor is telling me I can't be a freeholder and grant myself a lease and that the freehold needs to be held in a different entity (ie 'company' or 'different person' or 'Me and Other'), all of which will involve paying considerable SDLT again.

    Doesn't sound very fair to me as I've already paid SDLT. Is this the case or are there any exceptions for this kind of situation? I'm not gaining anything or trying to avoid tax, I've already paid it and the taxman will get another lump from the new buyer when I sell the Lower Flat.

    Thanks

    Steve

    #2
    Its the buyer who pays sdlt.

    Perhaps you should arrange to sell the lower flat first.

    Comment

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