Multiple dwelling relief - stamp duty land tax

Craig75

I am looking to purchase an investment/development a few doors down from where I live.

Our offer has been accepted on a 9 bed HMO with 3 bungalows that has planning for 7 flats and 4 houses.

We thought the purchase would be classed as Commercial at 5% SDLT, however, we are now led to believe it is classed as residential 13% which kills the deal. The current 9 bed HMO and 3 bungalows are all on 1 title and in a company name. The vendor does not want to sell as an ongoing concern.
Freehold development & investment opportunity with planning permission for 7x flats and 4x houses

Current Use - Residential investment producing £85,318 per annum gross (A 9 Bed fully licenced HMO and 3x1 bed bungalows).

Planning permission to form 6x one bedroom & 1x studio flat (conversion) and 4x terraced houses !!!8232;(new build).

Could I split the title into 5 titles simultaneously on completion (1 title for the HMO and 4 titles for the 4 houses, or even 7 individual titles for the flats that will be built and 4 titles for the houses)? Would this qualify for Multiple dwelling Relief?

If splitting into 5 titles the SDLT would equate to £62k

If splitting to 11 titles the SDLT would equate to £42,493

As it stands the SDLT would be £125,750

What would the estimated cost be to split the titles?
I hope someone can help...

steampowered

This sounds like a case where you should be getting professional tax advice.

SDLT_Geek

There is some information here about multiple dwellings relief that might get you started; https://m.zoopla.co.uk/discover/buying/buying-a-home-with-a-granny-flat-find-out-if-the-3-stamp-duty-surcharge-could-affect-you/

It has very little to do with the titles into which the property is divided. It is more about suitability for use. Perhaps it is suitable presently for use as four dwellings: the house and three bungalows?