Buying Property Through a Trust: What Are the SDLT Rules?

Buying property through a trust can be a useful way to manage how an asset is owned. As of 2025, 835,000 trusts and estates are currently registered and open on HMRC’s Trust Registration Service.

But buying through a trust doesn’t offer a shortcut around Stamp Duty Land Tax (SDLT).

In many cases, SDLT will still be due. The amount you pay depends on the type of trust, the property being purchased and, sometimes, the circumstances of the beneficiaries.

This can make the calculation more complicated than a standard property purchase.

So, before you complete a purchase through a trust, it’s worth understanding which rules apply and what they could mean for your tax bill.

Does SDLT Apply When Property Is Purchased Through a Trust?

In most cases, yes.

Buying property through a trust doesn’t automatically make the transaction SDLT-free. Instead, the tax treatment depends on how the trust is structured and who is treated as buying the property.

For SDLT, trusts broadly fall into two categories:

• Bare trusts - including nominee arrangements.
• Settlements - which cover other types of trust.

Why does that matter? Because it can change who is treated as the purchaser and whether higher SDLT rates apply.

How SDLT Works for Different Types of Trusts

HMRC recorded 121,000 new trust and estate registrations in 2024/25 alone. But with different types of trust treated differently for tax purposes, it’s worth understanding the structure you’re using.

SDLT on Property Bought Through a Bare Trust

With a bare trust, the beneficiary is entitled to the trust property, while the trustee holds the legal title.

For SDLT, the beneficiary is usually treated as the purchaser. This also applies to many nominee arrangements, so the beneficiary’s circumstances can affect the SDLT bill. If they already own residential property, for example, the higher rates for additional dwellings could apply.

There are exceptions, including specific rules for new leases, so the individual transaction still needs to be considered.

SDLT on Property Bought Through a Settlement

A settlement is broadly a trust that isn’t a bare trust, including discretionary trusts and interest in possession trusts.

If a beneficiary has the right to occupy a residential property for life or receive income from it, they may be treated as the buyer when applying the higher SDLT rates. In other arrangements, including certain discretionary trusts, the trustees may be treated as the buyers instead.

The terms of the trust play an important part in determining the correct SDLT treatment.

SDLT on Property Purchased by Trustees

Where trustees are treated as purchasing the property, the SDLT due will depend on factors including the purchase price, type of property and whether higher rates apply.

Residential and non-residential property are also treated differently.

Do Higher SDLT Rates Apply to Trust Purchases?

They can.

Since 1 April 2025, the higher rates for additional residential properties have been 5 percentage points above the standard residential SDLT rates.

Whether you’ll pay them on a trust purchase depends on who is treated as the buyer. For example, with a bare trust, the beneficiary’s existing property ownership can affect the calculation, while different rules apply to settlements.

Are There Any SDLT Reliefs for Property Bought Through a Trust?

Potentially, but there’s no blanket SDLT relief simply because a property is purchased through a trust.

Reliefs available to individuals wont necessarily apply to trusts. First-time buyers’ relief is an example, as specific rules apply to who is buying the property and how it will be occupied.

Other SDLT reliefs may be available for certain transactions. Always check the conditions carefully before including a relief in your SDLT calculation.

How to Report SDLT for a Trust Property Purchase

If an SDLT return is required, it will normally need to reach HMRC within 14 days of the effective date, usually the completion date.

The process usually involves:

1. Working out the chargeable consideration.
2. Checking which SDLT rates apply.
3. Establishing whether higher rates or other surcharges apply.
4. Checking whether you can claim any reliefs.
5. Submitting the SDLT return and paying the tax due.

A solicitor or conveyancer will often handle the return as part of the purchase. However, the purchaser is still responsible for making sure the information is correct.

For the latest filing requirements, check the official GOV.UK guidance on Stamp Duty Land Tax.

Getting SDLT Right When Buying Property Through a Trust

SDLT is only one part of the tax picture when assets are held through a trust. Trusts and estates paid a combined £1.62 billion in Income Tax and Capital Gains Tax in the tax year ending 2024, according to HMRC. Getting professional advice can therefore be valuable not only when buying a property, but when considering the trust’s wider tax position.

Buying property through a trust can make SDLT more complicated, with the trust structure, beneficiaries and property itself potentially affecting the amount due.

Make sure you know the rules before completing a purchase to help avoid unexpected costs.

If you’d like expert guidance on SDLT when buying property through a trust, book a consultation or contact us today on 03300 88 66 86 or email [email protected]

About the author

Owais Bombaywala
Working closely with individuals and businesses to help grow their business requires a significant amount of experience and industry knowledge. Owais is BA (Hons) Accounting and Finance and Member of ACCA. Besides being a compliance champion, he specialises in Property tax planning. With over 7 years of experience in Accountancy and Tax world, our clients count on us to give them timely and up to date advise to help them make the right move. Owais works closely with some of the DNS’s most valued clients to give them the confidence they need to focus on their business. He is known for his calm nature and proactive approach. At DNS, we proud to be a modern and client centric firm. Our advise doesn’t just look at what’s best for your business moreover our aim is to help you achieve your personal goals. Away from work, he resolve family disputes and provide care and support to elderly people. He is a founding member of Human welfare organisation Hounslow.