multiple dwellings relief & higher rates of sdlt (march 2016)
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Multiple Dwellings Relief and the Higher Rates of Stamp
Duty Land TaxMarch 2016
Authorised and Regulated by the Solicitors Regulation Authority SRA Number 76681
Multiple dwellings relief (‘MDR’) is a relief which is often overlooked when the land transaction return is completed. If MDR is available but not claimed a purchaser can amend his return to claim the relief within 12 months of the filing date for the original return. The filing date is the last day of the period within which a return must be delivered (paragraph 2 Schedule 10 FA 2003).
SDLT: multiple dwellings relief and the higher rates of SDLT on purchases of additional residential properties
Multiple dwellings relief (‘MDR’) is a
relief which is often overlooked when the
land transaction return is completed.
Multiple Dwelling Relief and the Higher Rates of Stamp Duty Land Tax
March 2016
Section 83 FA 2011 inserted section 58D and Schedule 6B into FA 2003 to provide relief from SDLT in the case of a transaction or linked transactions involving multiple dwellings. Subject to certain exceptions, the provisions apply to transactions with an effective date on or after 19 July 2011. Where MDR is claimed, the rate of SDLT is determined by reference to the average price paid for the dwellings (subject to a minimum rate of 1 per cent).
MDR applies to ‘relevant transactions’. In order for a transaction to be a relevant transaction the transaction must involve the acquisition of two or more dwellings. Where an acquisition is of a single dwelling a transaction can still be a relevant transaction if it is linked to another acquisition of a dwelling or dwellings. In determining whether a transaction is a relevant transaction, superior freehold or leasehold interests in dwellings subject to leases granted for a term of 21 years or more are ignored.
MDR: Details of the relief
Multiple Dwelling Relief and the Higher Rates of Stamp Duty Land Tax
In order for a transaction to be a
relevant transaction the transaction must
involve the acquisition of two or
more dwellings.
March 2016
Paragraph 7 Schedule 6B sets out rules for determining what counts as a dwelling for the purposes of MDR. The rules are based on the definition of 'residential' in section 116 Finance Act 2003. For the purposes of MDR, a 'dwelling' means a building or part of a building which is suitable for use as a single dwelling or is in the process of being constructed or adapted for such use (paragraph 7(2) Schedule 6B). Land that is, or is to be, occupied or enjoyed with the dwelling such as a garden or grounds (including any building or structure on such land) and land that subsists, or is to subsist, for the benefit of the dwelling, is taken to be part of the dwelling. There is no definition of dwelling for the purposes of Schedule 6B but sections 116(2)-(5) are applied by paragraph 7(7) Schedule 6B.
MDR: Details of the relief
Multiple Dwelling Relief and the Higher Rates of Stamp Duty Land Tax
…a 'dwelling' means a building or part of a
building which is suitable for use as a
single dwelling or is in the process of being
constructed or adapted for such use…
March 2016
This is an extract from a draft of the section on MDR from Ann’s forthcoming new edition of her book on Stamp Duty Land Tax.
To get FREE access to the full draft section on MDR (which includes examples of SDLT calculations) please visit this link:>> http://bit.ly/SDLTMDR <<
Free extract…
Multiple Dwelling Relief and the Higher Rates of Stamp Duty Land Tax
March 2016
Get access to a free draft on Multiple
Dwellings Relief and Stamp Duty Land Tax. Access Now:
http://bit.ly/SDLTMDR
Solicitor and tax specialist with over 30 years experience
Areas of expertise: Stamp Duty Land Tax (SDLT), Business Tax and VAT
Set up her own practice after 16 years in the City
Author of ‘VAT and Property’ published in 2015 and co-authored ‘Stamp Duty Land Tax: a practical guide for lawyers which is due to be updated in 2016
About Ann…
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