Stamp Duty Reliefs and Surcharges on Probate Sales: What You Really Need to Know
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Buying a property through probate can be a bit daunting. Whether you’re the buyer, executor, or a family member involved in the sale, it’s easy to get caught out by Stamp Duty Land Tax (SDLT) surprises. Probate sales have some specific rules around stamp duty that don’t always come up in regular property purchases. If you’re wondering how stamp duty works in these situations—and what reliefs or extra charges might apply—this guide will help clear things up. Plus, we’ll explain how experts like UK Property Accountants can make the whole process much smoother.
What Exactly Is a Probate Sale?
When someone passes away, their property often needs to be sold to settle debts or divide the estate among beneficiaries. That’s what we call a probate sale. The executor or administrator handles the sale once they have the legal green light (a grant of probate or letters of administration).
Now, when buying a probate property, you’ll still be responsible for paying stamp duty—just like any other property purchase. But there are some quirks because the property is coming from an estate, not a typical seller.
Are There Any Stamp Duty Reliefs for Probate Sales?
The good news is, yes—there are a few situations where you might not have to pay stamp duty or you could get a reduction:
- Transfers to Spouses or Civil Partners: If the property goes directly to the deceased’s husband, wife, or civil partner, stamp duty usually doesn’t apply. This is a common relief to keep things simple within families.
- Inheritance Transfers: If the property is inherited with no money changing hands (like passing through a will), then stamp duty won’t be charged. But if beneficiaries buy the property from the estate, stamp duty applies on the purchase price.
- Multiple Dwellings Relief: If more than one property is being sold together as part of the probate, you might qualify for this relief, which reduces the overall stamp duty bill by averaging out the values.
Watch Out for the Additional Dwellings Surcharge (ADS)
If you already own a home and are buying a probate property as a second residence or investment, there’s an extra cost to be aware of: the Additional Dwellings Surcharge. This is an extra 3% on top of the regular stamp duty rates.
This surcharge trips up a lot of buyers because it applies even if the property is coming through probate. So if you’re buying a second home or buy-to-let from an estate, make sure to factor this into your budget.
Conclusion
Stamp duty on probate property isn’t always straightforward. While there are some helpful reliefs, surcharges like the ADS can quickly increase your costs if you’re not prepared. The key is understanding the rules and seeking expert advice to make sure you’re not paying more than you need to.
If you’re buying or managing a probate property sale, reaching out to specialists like UK Property Accountants early can take a huge weight off your shoulders. They’ll make sure your stamp duty is handled properly, so you can focus on what matters most during what’s often a difficult time.
