Stamp duty relief on annexe

Play_fair84

Hi everyone,

we are purchasing a property with annexe, I believe it will qualify as a separate dwelling (has own kitchen, bathroom, separate external door and separate address/council tax band on gov.uk - just need to check if lockable door to main house) so could claim multiple dwelling SD relief.

however, plan when we are in is to get rind of annexe and turn back into one family home. So my question is can we claim the relief but then get rid of annexe?

is there a time limit for HMRC investigating? (I know they were cracking down on granny anexes at one point). 

This purchase replaces our one and only family home. 

Any answers or comments appreciated, many thanks!

user1977

Generally with SDLT you apply the rules based on what the position is at completion (apart from the exceptions!)

SDLT_Geek

Play_fair84 said:

Hi everyone,

we are purchasing a property with annexe, I believe it will qualify as a separate dwelling (has own kitchen, bathroom, separate external door and separate address/council tax band on gov.uk - just need to check if lockable door to main house) so could claim multiple dwelling SD relief.

however, plan when we are in is to get rind of annexe and turn back into one family home. So my question is can we claim the relief but then get rid of annexe?

is there a time limit for HMRC investigating? (I know they were cracking down on granny anexes at one point). 

This purchase replaces our one and only family home. 

Any answers or comments appreciated, many thanks!

I assume the property is in England, as you refer to HMRC.  So the relevant stamp duty is stamp duty land tax, and the relevant relief is multiple dwellings relief.

There is a withdrawal of the relief if something happens within three years, which, had it happened by the time of the completion of the purchase, would have meant more SDLT was payable.

So if you start to make changes to turn the property into a single dwelling within three years, then you have to self assess to the extra SDLT. It is the taxpayer’s responsibility to deal with this, at risk of criminal sanction.  It is not a matter of waiting to see if HMRC ask about it. 

Play_fair84

Thanks both and appreciate what you saying (plus have read the HMRC docs on it now)

all that said, if you didn’t self-assess, how would HMRC realistically ever know/find out what you did within your home? Particularly now with this relief being abolished in June, will they really care or follow up?

SDLT_Geek

Play_fair84 said:

Thanks both and appreciate what you saying (plus have read the HMRC docs on it now)

all that said, if you didn’t self-assess, how would HMRC realistically ever know/find out what you did within your home? Particularly now with this relief being abolished in June, will they really care or follow up?

Of course they would care.  You would be committing tax fraud if you failed to declare it when you know (as you do) that tax is due and fail to self-assess.

This is a money saving site, not a site to help people evade tax!

ProDave

Multiple dwellings SDLT relief is being abolished on 1st June, so if you don't complete before then you will pay full SDLT for both the main house and the annex.