Stamp duty relief on probate properties can be a confusing process and as it can often be a sensitive time for those involved a lot can be missed or overlooked when it comes to paying stamp duty when buying probate property.
There are two ways that you can become involved with a probate property. Firstly, if you inherit a property from a deceased person and secondly, if you are buying a probate property.
Stamp Duty Relief On Inherited Probate Properties
If you inherit the estate of a deceased person, you do not have to pay stamp duty land tax as you are exempt from this tax. However, you might be subject to inheritance tax charges depending on the value of the estate that you have inherited. If you have paid stamp duty on a probate property then you should contact us so that we can investigate the details of your case and help you to claim back what you have paid.
Stamp Duty When Buying Probate Property
If you have purchased a property from probate or if you are thinking of doing so then you will be required to pay stamp duty land tax on the property. If it is not the first property you have purchased then you will also be required to pay an additional 3% of stamp duty land tax for the second property surcharge. If you end up overpaying or do not meet the requirements for exemption then you may be eligible for a stamp duty refund on your probate property.
Stamp Duty Relief On Buying From Probate
Stamp duty does come at a huge cost so it can be reassuring to know that there are reliefs available for specific properties and certain circumstances. When it comes to buying probate property the buyer is exempt from paying stamp duty land tax if all of the conditions below apply:
- The purchase is made from personal representatives of the deceased person.
- The deceased individual occupied the property as their main residence at some time in the last 2-year period ending on the date of their death.
- The area of land acquired does not exceed the permitted area of 10,000 sqm.
If you believe you are eligible to receive stamp duty relief or a rebate for what you may have already paid, the application process is very simple. Just contact us with details of the purchased property, our tax specialists will then determine your eligibility before collecting all the necessary documentation needed to send to HMRC.
Partial Stamp Duty Relief On Probate Properties
If the property land does exceed the permitted 10,000 sqm but the other two conditions have been met then you could be eligible for partial stamp duty relief on the probate property. However, it is important to consider that when partial stamp duty relief is claimed, part of the considerations for acquisition then become chargeable. This is the difference between the market value of the permitted area and the market value of all the property land. So, it is unlikely that you will be able to receive a full stamp duty land tax exemption or refund in this case.
It is also possible that partial stamp duty relief can be applied for if the property trader spends more than £10,000 on refurbishments, or grants a lease or a licence on the property. However, if any of the prior conditions are met then you may have to pay stamp duty in full so it is important to understand the conditions in full before applying for partial relief. This is where CapEx Tax specialists can help, we can help you to know what you are entitled to before you apply and ensure that you have all the correct information and documentation before applying for stamp duty relief on probate with HMRC.
Definition Of Probate Property
You must keep in mind that residential property refers to any land or buildings that are used to live in or are suitable to be used as a home or to properties that are being built or modified to become a home eventually.
Additionally, any garden, grounds, buildings or structures related to the property will also be treated as residential. Simply put, a dwelling is a building or part of a building that has all the necessary facilities for everyday living, such as bathroom, kitchen and living room facilities. It should also provide enough room between neighbouring properties.
Probate refers to the legal proceedings in handling a deceased person’s estate and fulfilling the conditions of their last will and testament.
A lot of estates do consist of property such as the home of the deceased person; the term probate property describes such situations. Probate properties do have different rules when it comes to stamp duty land tax that is useful to be aware of as a buyer or a seller.
How Can CapEx Tax Help?
If you think that you could be entitled to claim a stamp duty relief on probate then contact us today to share the details of your case and our tax specialists will help you to process your claim with HMRC.