Stamp Duty – Marriage, Civil Partnership and Divorce

Stamp Duty Land Tax (SDLT) is payable when there is a chargeable land transaction.

Different rules apply for marriage and civil partnerships and certain transactions made in connection with a relationship breakdown are exempt from SDLT.

Where a spouse or civil partner makes a gift of property to the other spouse/civil partner, generally no charge to SDLT will arise because there will be no chargeable consideration.  However, if the property being transferred is subject to a mortgage or charge, SDLT may arise as the assumption of responsibility for an existing debt by the recipient (transferee) will constitute chargeable consideration on which SDLT must be paid.

A transaction is exempt from SDLT when it is made in connection with the end of a marriage or a civil partnership.  Usually that would involve the transfer of the home from joint to sole ownership.  In such cases, SDLT is not payable and the transaction will generally be effected:-

• Pursuant to a court order made: –
  • On granting a decree of divorce, nullity of marriage or judicial separation
  • In connection with the dissolution or annulment of the marriage, or a judicial separation, at any time after the granting of such decree
  • At any time made under certain matrimonial legislation, or
• At any time pursuant to an agreement of the parties made in contemplation of:
  • The dissolution or annulment of the marriage
  • Juridical separation or
  • The making of a separation order

So this would include a deed of separation.

Similar exemptions are available for the ending of a civil partnership, following civil partnership legislation in December 2005.

The above exemptions are not available if the transaction involves a third party.  For example, that could be the transfer of the family home from a company to husband or wife, even where the other spouse owns the company.

For further information about property ownership and divorce please contact Kim Beatson 020 7940 4000 or kim.beatson@anthonygold.co.uk.