My sister owns her own home in Manchester jointly with her two children. She wants to sell and purchase a smaller bungalow for £275,000 and the children agree. Both children own their own homes, so the question arises what stamp duty land tax (SDLT) will have to be paid on the purchase, as all three names must be on the sale agreement to comply with the late husband’s will.

Arthur Weller replies:
From what I understand, your sister and her two children are jointly selling the old property, but only your sister is purchasing the new property, and the question is whether she will have to pay the extra 3% SDLT on the purchase of the new property. The answer is that your sister will not have to pay the extra 3% SDLT, because she is replacing her previous main residence. However if the new purchase is going to be made by your sister together with her two children, the extra 3% SDLT will apply – see HMRC’s Stamp Duty Land Tax manual at www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm09810 (Example 2).