SDLT relief for multiple dwellings

kinger101 · 28 October 2017 at 2:16PM

Mutton_Geoff wrote: »

The property has one numerical address and that it what is on the title. There is access to two courtyards from the road. One is vehicular, one is pedestrian. Both provide access to the individual front and back doors of the properties. The property is one single cohesive building that has been joined then divided again in the past (50-100 years ago). One part is a 4 bedroom, 3 bathroom house and subservient to that is a one bed/one bath attached "cottage".

The cottage is subservient to the main house and is a smaller fraction of sq footage.

The tax treatment is not clear which is why a specialist has been contacted for a quote. I am looking for other quotes and advice, here because of my respect for the specialist knowledge of many contributors on this forum, and of my regular tax accountant (awaiting response). Of course I shall ring HMRC but this is difficult using SIP phones or Skype. I will be able to call them on Monday but was hoping to elicit a technical reply here that would assist me in dealing with them.

The potential return is high enough for me to warrant paying for professional advice rather than risk losing it because I happen upon a clerk at HMRC who is not intimate with the rules. Tax avoidance is often better through professional bodies since they are insuring me against a possible backfire.

I have the same issues regarding exceedance of the pensions AA and LTA each year and I employ a tax accountant to work it out for me, so complex are the rules for the layman.

From what you've said, it seems as though the granny annex rule would apply, but the taxation professional would be in a better position to advise to what extent you'd need to demonstrate this.

I don't think what you're doing is tax avoidance. That term really applies when someone operates within the law, but in a way Parliament did not intend. Really, it would fall under "tax planning". Decided whether to apply MBR for your particular circumstances. You have no obligation to maximize the amount of tax you pay.

00ec25 · 28 October 2017 at 5:29PM

kinger101 wrote: »

I was under the impression OP was implying that one of the properties satisfied the two-thirds/same grounds criteria for the higher rate, but I'm not sure how the "granny-flat" exemption interacts with MDR.

Depending on exactly how the legislation is worded, it might be possible to obtain both exemptions.

Would be useful if OP could clarify.

OK, so given the clarification now posted by OP, yes I agree the subsidiary dwelling rule appears to be met "2.10B In certain cases a purchase of more than one dwelling will be treated the same as if a single dwelling had been purchased. This is the case if any of the dwellings purchased are subsidiary dwellings. A subsidiary dwelling must be within the same building as or in the grounds of another dwelling purchased in the same transaction (the principal dwelling). The principal dwelling and the garden and grounds attributable to that principal dwelling must be at least two thirds of the value of the land purchased in the transaction"

Mutton_Geoff · 28 October 2017 at 6:24PM

One of the issues I think is that the title is for a single property though that has been divided. I'll keep everyone posted in case others have this experience.

davidmcn · 28 October 2017 at 6:36PM

Mutton_Geoff wrote: »

One of the issues I think is that the title is for a single property though that has been divided.

Why is that relevant? It's the number of properties which matters, not how they're registered.

Mutton_Geoff · 28 October 2017 at 8:39PM

davidmcn wrote: »

Why is that relevant? It's the number of properties which matters, not how they're registered.

Thank you for that. I was incorrectly viewing the land registry document as a sort of "receipt" for the number of items I was purchasing.

Dangerous48 · 30 November 2017 at 6:29PM

Hi I am trying to do the same. I have rung HMRC, but they were not that forthcoming and only suggested I apply and they would decide. I have sent off for the form, hopefully it is the right one!! I am going to complete, return, cross my fingers and hold my breath.

westy22 · 2 February 2018 at 5:04PM

Did either Mutton Geoff or Dangerous48 get anywhere with these investigations and claims as I am interested in the outcome? Would be grateful for any updates. TIA

paul1315 · 9 February 2018 at 4:40PM

I too am in a similar situation.
Thinking about moving house but whether MDR is available or not will affect that decision.
HMRC took over 30 minutes on the phone to tell me nothing of use. Advised I write in with a technical query (40 working days for a reply so that’s no use).
They couldn’t even point me to the tax manuals against which this self assessed tax is supposed to be based.

paul1315 · 11 February 2018 at 11:10PM

I think phoning the SDLT helpline and expecting to be able to speak with someone who knows about that tax is fair.
On purchasing a property I believe the return has to be filed within 30 calendar days so only being able to get an answer, if I do get an answer, within 40 working days seems unfair and an unacceptable wait.
The tax paying public should not have to put up with such a poor service.

The manuals themselves are all too vague and open to interpretation in certain places which makes it impossible to know how a particular case will be treated.

For example whoever writes these should be told not to define a word or term using the same word or term:
!!!8220;For the purposes of the relief a !!!8220;dwelling!!!8221; 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.!!!8221;
Clear as mud that one. After doing some research it seems they might want to take account of separate entrances, how utilities are metered etc, yet where are these or other determining factors detailed?
There should be s simple set of rules to apply that anyone, even me or a call centre person can understand. It is after all a self assessed tax so needs to be easily assessable.

Mutton_Geoff · 11 February 2018 at 11:33PM

westy22 wrote: »

Did either Mutton Geoff or Dangerous48 get anywhere with these investigations and claims as I am interested in the outcome? Would be grateful for any updates. TIA

Nothing yet, but will chase them up this week.

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SDLT relief for multiple dwellings

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