Q&A: tax liability when parents buy a property for child

In this week’s Q&A, Teddy Rawlings, tax adviser at Croner-i, explains the stamp duty land tax (SDLT) implications when parents buy their child a property and own another dwelling

Q: I have a husband and wife client that are looking at helping their son out by buying a property and letting him live there rent free. The wife owns a property which is rented out and the couple reside in rented accommodation.

The husband bought the property in his sole name so did not believe the 3% surcharge applied to him and filed a nil stamp duty land tax (SDLT) return.

Is this correct? If not, and they have to pay the surcharge, can they dispose of the rental property to get the surcharge refunded as it was their only property?

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