My husband and I have taken an equity release lifetime mortgage lump sum on our jointly-owned home in Bristol with the sole purpose of gifting the amount towards the purchase of a flat that our daughter has chosen to buy. Our daughter is putting in her own savings of about £9,000 to top up our lump-sum gift towards the purchase. The property will be in her sole name, and it will be her only home. Will she be exempt from having to pay stamp duty land tax on the proportion (about 88%) of the purchase price of the flat that is being gifted or contributed by us? 

Arthur Weller replies:  

Your daughter will be liable to pay the full 100% stamp duty land tax (SDLT) for this property because she is the only person acquiring the property. The fact that 88% of the funds to purchase comes from someone else is irrelevant. Imagine someone getting a mortgage to enable them to purchase a property – they are still liable to all the SDLT. However, from what you have written, if her £9,000 is 12% of the property, that means the whole property is being purchased for £75,000. This is below the SDLT threshold of £125,000, so there will be no SDLT to pay. Since it seems that this is her only property, the extra 3% will also not apply (she could also possibly be eligible for the SDLT first-time buyers relief.)