When you are buying a property, you might not be aware of the additional cost that Stamp Duty Land Tax (SDLT) can bring.

These rules are a little different if you are dealing with a probate property and you are managing the estate of someone who has passed.

Some probate properties are eligible for SDLT relief and you may be able to save yourself some money or reclaim the tax you have overpaid.

What is Stamp Duty Land Tax (SDLT)?

SDLT is a tax levied by the UK Government on property transactions in England and Northern Ireland.

The tax is calculated on the property purchase price and depends on whether the property is residential, non-residential or mixed-use.

Buyers must submit an SDLT return to HMRC and pay any tax due within 14 days of completion.

Reliefs and exemptions exist in certain circumstances, including some probate property transactions.

What is probate property?

Probate is the legal process of administering a deceased’s estate according to their Will, or if there is no Will, following the rules of intestacy.

A probate property is any property included in that estate, which could be the deceased person’s home or additional land and buildings.

Executors or personal representatives who manage the estate must ensure these assets are distributed according to the law.

However, it is up to the buyers purchasing the probate property from them to follow the specific SDLT rules.

Can you get SDLT relief on probate properties?

If you inherit a property, SDLT is generally not payable and inheritance alone does not create tax liabilities.

If you purchase a probate property from the personal representatives of the deceased, SDLT normally applies.

However, certain buyers, such as property traders, may qualify for full or partial relief.

Who can claim SDLT relief?

SDLT relief is primarily for property traders, such as companies, LLPs or partnerships, that buy and sell residential properties as part of their trade.

Private individuals purchasing a probate property for personal use or as an investment are generally not eligible for this relief.

To qualify for full SDLT relief on a probate property, you must usually meet these conditions:

  • The property is purchased from the personal representatives of the deceased
  • The deceased occupied the property as their main or only residence within two years of passing
  • The total land area does not exceed 10,000 square metres
  • The buyer does not grant leases or licences
  • The buyer does not allow occupancy to themselves, their employees or connected individuals
  • Refurbishment expenditure does not exceed £10,000 or five per cent of the purchase price, which is capped at £20,000

Can you receive partial SDLT relief?

If the property exceeds the permitted land area or refurbishment limit, partial relief may be available.

SDLT could be payable on the portion of the property or land that falls outside the relief limits and this will be calculated based on market value differences.

How do you claim SDLT relief?

To claim relief, you must complete an SDLT return and note that the property qualifies as a probate acquisition.

You must also provide supporting documents, such as the grant of probate or letters of administration, as this can ensure your claim is processed efficiently.

Sometimes buyers may overpay SDLT due to miscalculation or reassessment and if this happens, you could be able to claim a refund from HMRC.

If you are eligible for SDLT relief, you should seek professional advice to ensure your claims are submitted correctly and avoid any errors.

How can we help you get SDLT relief on your probate property?

SDLT on probate properties can be confusing, but relief does exist for qualifying purchases and the right financial support can help you access this.

Our financial team can verify your eligibility for full or partial relief, calculate the correct SDLT liability and help you submit an SDLT return.

We want to help you get the best value for your probate property and make sure you pay the correct tax and avoid any unexpected liabilities.

If you need further support or advice on Stamp Duty Land Tax relief, contact our team today.