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clearing legal charge/ duty question

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A question cropped up in discussion yesterday regarding duty payable on legal charge debt purchases. Just wondered if anyone had some answers??



1stly) If someone (or a company) buys a debt that has a legal charge over a property do they pay stamp duty?

In my mind, if you buy a debt you are not transacting on the property so I would think no duty is payable?? Yes/No??


2ndly) If the property is subsequently sold - excluding the debt - for a price which equals the difference between the debt level and the market sale value - on what price is duty paid?

For example: the property is potentially worth say £3.5m / the 'debt' is say £2m / the title deeds are sold to someone else for £1.5m. If the debt is retained separately (by the debt purchaser) is duty paid just on the property transaction of £1.5m?


3rdly) what happens when the new property owner later agrees to clear the 'debt' - which is no longer charged against the property, rather just a debt? As it is just a 'debt' and not attached to the property would the new owner pay duty?


Anyone have any answers to these questions?

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Once sold the CO is either paid or not (if restriction k)

It doesn't stay on the property


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