- This topic has 2 replies, 1 voice, and was last updated 15th April 2018 at 10:34 am by
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The strict position is that both pay tax on £225K. However based on the concessionary treatment outlined in SDLTM04020A the mother would pay tax on £225k and the son on £150k on the basis that he has made a gift to his mother of the difference in value between what he is transferring and what he is receiving. Logically the mother should also pay tax only on £150k because she has received a gift of £75k but the concession only seems to go so far. In this instance I don’t think that the mortgage repayments affect the position.
Patrick, can’t you argue that if properly documented your scheme works so that son is in effect gifting a 1/3 share in his £225k house (worth £75k) to his mother and swapping the remaining 2/3 share (worth £150k) for his mother’s £150k house? In my view the legislation is not unambiguously clear that you cannot do that and I think there was some discussion in the STPG a few years back that that should work.
