Mark Smith (Barrister-At-Law)

Registered with
Wednesday 27th November 2013

Latest Comments

Total Number of Property118 Comments: 243

Mark Smith (Barrister-At-Law)

11:25 AM, 27th May 2022, About 11 hours ago

Transfer part of ownership of BTL flat to spouse without having to pay SDLT?

Lisa can transfer up to £125,000 chargeable consideration (deemed assumption of the loan proportion by her husband) to her spouse with no SDLT, but an SDLT return will need to be filed. The 3% uplift does not apply between spouses and civil partners.
Under £40,000 no return is needed.
There is no CGT on transfers between spouses and civil partners either.... Read More

Mark Smith (Barrister-At-Law)

16:31 PM, 10th March 2022, About 3 months ago

Mandatory to register non-taxable trusts with HMRC’s Trust Registration Service?

These requirements arise from the Government’s efforts to combat money laundering by requiring transparency in a number of hitherto private transactions, including trusts. Several of our services include the creation of a trust and we have advised on these requirements to all past and present clients who are caught by them.

a) LLP.
In an LLP the members hold the partnership properties on trust for the LLP. Our view is that this type of trust is not caught by the requirement. Certain trusts created in the context of commercial transactions are excluded from registration by Sch3A (14) of the Regulations 2017 when they meet the following requirements.

The trust must be created for the purpose of:
• Enabling or facilitating a transaction effected for genuine commercial reasons, or
• Protecting or enforcing rights relating to such a transaction. The trust must also be incidental to the principal purpose of the transaction.

b) Substantial Incorporation Strategy or SIS (formerly Beneficial Interest Company Transfer or BICT).
In each of these transactions, unless all of the legal titles have been transferred to the company at the Land Registry, the legal owners hold the properties on trust for the company. Our view is the trusts created in these transactions are not caught by the requirement.

Certain transactions (including sale of land) require specific formalities to be carried out in order to transfer legal title. Where beneficial title passes on completion, but legal title does not pass until those formalities are carried out, the legal title may be held on trust for the relevant party to protect their interests, pending completion of those formalities.

Trusts created in that context are excluded from registration by Sch3A (15) of the Regulations 2017 if they meet the requirements below.

This exclusion applies to a trust created on the transfer or disposal of an asset, where the purpose of the trust is to hold the legal title to the asset on trust for the person to whom the transfer or disposal is being made until the time when the procedure required by law to effect the transfer or disposal of legal title is completed.

c) Discretionary Trusts in Smart Companies or with Freezer/Growth share structures.

These trusts will need to be registered. The first deadline is 1st September 2022 at present, so there is no particular pressure of time.

There are two separate registration requirements.

The first arises from the trust being an express trust, and the second additional requirement arises when the trust becomes liable to any form of tax. It is highly unlikely that this will arise before the 10-year anniversary charge to IHT, and even then is unlikely to arise given the value of the assets that would be held in the trust at that juncture. Nevertheless, you should take professional advice from your accountant.

The first deadline arises on 1st September 2022. The lead trustee (nominated by the trustees to file the registration) or your appointed agent will need to obtain a Government Gateway Code HERE

Lead trustees
All trustees are equally legally responsible for the trust, but you must nominate one ‘lead’ trustee to be the main point of contact for HMRC. The lead trustee will receive the trust’s UTR if registering a taxable trust and a URN if registering a non-taxable trust. You will need to keep their contact information up to date.

You should give the details of all known beneficiaries who can benefit from the trust. If you have more than 25 beneficiaries in any one beneficiary type, keep a note of additional beneficiaries for your own records.

Named beneficiaries
You must give details of all individuals, trusts, charities and organisations named as beneficiaries in the deed. Some named beneficiaries will only benefit when a certain event happens, such as when another beneficiary dies. You can include these in a class of beneficiaries until the event occurs. At that point, provide their details on the register as a named beneficiary.

Classes of beneficiaries
You can use a ‘class’ of beneficiaries to describe a group of individuals who are not yet known or named individually in the trust deed, for example, future grandchildren. This can also include named potential beneficiaries. When a member of a class of beneficiaries benefits from the trust, and so becomes known, you must give their details. You will be asked to give a description of each class.... Read More

Mark Smith (Barrister-At-Law)

11:02 AM, 22nd February 2022, About 3 months ago

SDLT on Private Purchase of two properties to be combined to one?

But if you make the 2 dwellings into one in the three years subsequent more SDLT is due based on the tax for a single dwelling.... Read More

Mark Smith (Barrister-At-Law)

18:35 PM, 14th October 2021, About 7 months ago

Related Party or at Arms Length Transaction?

This proposed transaction would be between 'connected parties' and would be deemed to take place at market value regardless of the actual consideration paid.

The issue is how to establish the market value. Your son has tried to sell during a bull market and the best offer he has received is the 'BMV' company-ironically this offer may have set the benchmark for 'MV'.

To avoid an excessive CGT bill your son will have to show the price you pay was the best achievable by reasonable marketing over a reasonable time between a willing seller and a non-desperate buyer.... Read More

Mark Smith (Barrister-At-Law)

9:45 AM, 14th October 2021, About 7 months ago

Lost DIY Declaration of Trust - effective date and CGT liability?

"If we draw up a declaration of trust now, I understand the signatures cannot be back dated. However, can it essentially say that this has been in force since 2014, and we are only writing it down to reconfirm the terms? Would we be able to draw up such a document, and would it be effective?"

Yes. Please message me.... Read More