CASE STUDY
Helping an International Property Owner Reduce UK SDLT Exposure
Strategic cross-border tax analysis identified a potential route to avoid an additional 5% SDLT surcharge on a £1 million London property purchase.
POTENTIAL SDLT SAVING
£50,000
On a £1 million property purchase
Cross-border analysis
Risk-managed approach
HMRC clearance recommended
Client
International property owner
Matter
£1 million London property purchase
Jurisdictions
UK and France
Potential outcome
Up to £50,000 SDLT saving
The Challenge
The client planned to purchase a £1 million residential property in London while holding property interests overseas, including both full ownership and bare ownership under a French usufruct structure.
The key question was whether those overseas interests would be treated as a “major interest” for UK SDLT purposes and trigger the additional 5% surcharge.
UK guidance on foreign bare ownership structures is limited, making the position technically complex.
Our Approach
We carried out a detailed cross-border review, including:
- Analysing the relevant UK SDLT legislation
- Reviewing HMRC guidance and case law
- Assessing the legal nature of the French bare ownership interest
- Comparing the tax outcomes and risks under different transaction scenarios
We then identified the most compliant route and recommended obtaining Non-Statutory Clearance from HMRC before completion.
The Outcome
Our analysis identified a strong legal basis for arguing that the client’s bare ownership interest may not be treated as a “major interest” for SDLT purposes.
If confirmed by HMRC, the client could potentially complete the London property purchase without paying the additional 5% surcharge.
Standard SDLT
Normal rates
£43,750
Higher-rate SDLT
With 5% surcharge
£93,750
Potential Saving
£50,000
The final tax treatment depends on HMRC’s view of the facts and the client’s specific circumstances. We recommended obtaining Non-Statutory Clearance before proceeding.
If you hold property or ownership interests overseas, early advice can help identify potential SDLT risks before contracts are exchanged.