Chapter 14 Problem questions and answer guidance

Post-completion procedures

Question

a) The sale of the freehold at “Dunromin” 38 Hillside, Liverpool for £120,000 has today been completed by a transfer. The purchaser has simultaneously mortgaged the property to secure a loan of £105,000. How will you deal with Stamp Duty Land Tax considerations for a transaction of this type? (5 marks)

b) Your client, David Jones, who is not a first time buyer, has today completed his purchase of two residential properties from the same seller Humphrey Berkovitch. The sale contract was at £200,000 but the two transfers were prepared so as to show one at £80,000 and the other at £120,000. What is the stamp duty land tax liability, if any, for your client bearing in mind the starting threshold for the payment of this tax? (5 marks)

c) You have just been instructed by Paulene Grain who has passed to you the deeds of her home at 69 Leggland Way, Brighton, West Sussex. When she bought the property, after selling her previous residence, she conducted her own conveyancing and paid £170,000 for this freehold residential property. She has given you all her deeds saying it was an unregistered title but there should be no problem because she only completed the purchase this year; in fact just four months ago. You have checked and the title appears to be in order up to the conveyance to the client. Ms Grain did not pay any stamp duty land tax at the time of the purchase because she said it was not a registered title. She now wants to sell quickly as she has a very keen buyer at £185,000. She has an offer of an excellent job in Switzerland and wants to move abroad as quickly as possible. This is the main reason for the proposed quick sale. Please advise her. (10 marks)

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