Transfer Duty on sale of a company owning residential property

Once upon a time, you could sell the shares in a company that owned fixed property and only pay Securities Transfer Tax (1/4%). Then in December 2002 it all changed.

That was a long time ago, but many people still don't understand the full implications, so here they are -

A Residential Property Company is one in which more than 50% of it's assets are residential properties.

If shares in that company are sold, then the shares are treated as fixed property and the sale attracts Transfer Duty, not on the value of the shares, but on the value of the property that they represent (that is, ignoring any liabilities). The rates of Transfer Duty are 


 It is the purchaser who pays the Transfer Duty, whilst the seller pays any Capital Gains Tax. Securities Transfer Tax is not payable under these circumstances.

This only applies to residential property and not to commercial property.

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