Sarah Bradford highlights a stamp duty land tax trap that can arise when transferring property between spouses, and how to avoid it.
Many people are aware of the rule for capital gains tax (CGT) purposes that treats transfers of assets between spouses and civil partners as being at a value that gives rise to neither a gain nor a loss. The effect of this is that the transferee assumes the transferor’s base cost. This is useful from a CGT planning perspective as it allows spouses and civil partners to transfer an asset or a share in an asset prior to sale to make use of the spouse or civil partner’s annual exempt amount or lower tax bands.
Inter-spouse transfers also benefit from an exemption from inheritance tax (IHT). Thus, there is no IHT to pay either when a gift is made on death or on a lifetime gift if the transferor does not survive seven years from the date of the gift.
However, when it comes
