Linked Transaction Tax

LStone

Hello. 

We’re buying 2 properties in the same building from the same seller. One is to be our main residence and the other is to be rented to a tenant, until such time as our children move out, then we plan to retire into smaller property. 

As both properties are under 250,000 we have no LBTT to pay but are subject to Additional Dwelling Tax which we were aware of (which we know we can reclaim on our main residence when our previous home sells) 
However we have just received costs and there is Linked Transaction Tax because we are buying both properties from the same seller! An additional 8,000 pounds that we hadn’t accounted for. The solicitor isn’t sure if it’s ‘avoidable’ and to check with accountant, accountant said check with solicitor. Apparently we need a LBTT expert! 

I understand what this tax is but we’re not developers breaking down units to avoid tax. One accountant saying we pay it on the second property but not our main residence..? 

Anyone any experience or can advise please? 

princeofpounds

This is Scotland right?

davidmcn

princeofpounds said:

This is Scotland right?

If it wasn't Scotland, it wouldn't be LBTT.

But the principle that stamp duty (or equivalent) is calculated on the total price if your deal is effectively to buy multiple properties isn't new or particularly different between the nations as far as I am aware.

LStone

davidmcn said:

princeofpounds said:

This is Scotland right?

If it wasn't Scotland, it wouldn't be LBTT.

But the principle that stamp duty (or equivalent) is calculated on the total price if your deal is effectively to buy multiple properties isn't new or particularly different between the nations as far as I am aware.

Stamp Duty (LBTT) doesn’t apply as both house are under their own title and both under £250,000. We knew we’d have to pay additional dwelling as we own other properties. 

It’s the additional Linked Transaction Tax we want to avoid..? 

davidmcn

LStone said:

davidmcn said:

princeofpounds said:

This is Scotland right?

If it wasn't Scotland, it wouldn't be LBTT.

But the principle that stamp duty (or equivalent) is calculated on the total price if your deal is effectively to buy multiple properties isn't new or particularly different between the nations as far as I am aware.

Stamp Duty (LBTT) doesn’t apply as both house are under their own title and both under £250,000. We knew we’d have to pay additional dwelling as we own other properties. 

It’s the additional Linked Transaction Tax we want to avoid..? 

It's not a different tax, it's just the principle that your LBTT is calculated on the aggregate consideration for both properties.
Start here, if you haven't already:
https://www.revenue.scot/land-buildings-transaction-tax/guidance/lbtt-legislation-guidance/determining-chargeable/lbtt2008