Additional Dwelling Supplement (ADS) payable on multiple purchases under £40k?

Additional Dwelling Supplement (ADS) payable on multiple purchases under £40k?

11:01 AM, 12th August 2021, About 3 years ago 4

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I am in the process of purchasing 2 flats for £39k each in Scotland from the same seller. Additional dwelling supplement tax (4% of purchase price) is normally zero for properties under £40k.

However, my solicitor has interpreted this as a linked transaction and thinks that ADS is payable on the combined total purchase price. This is because I am using one mortgage for both properties, she advises that if this was a cash purchase, no tax would be liable.

I have read the relevant Revenue Scotland guidance on LBBT and ADS and don’t interpret this the same way. Does anyone have any experience or advice on this?

Many thanks

Alex


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Comments

Adrian Alderton

9:38 AM, 13th August 2021, About 3 years ago

Speak to a couple of other scottish solicitors. I have found that the agents/solicitors etc to be very helpful in Scotland. I also had an ADS query and was told it was payable but further enquiries with other solictors indicates that it is not so I am proceeding.

Good luck

Jayemgee

15:44 PM, 13th August 2021, About 3 years ago

The proble is the one mortgage and so 4% is due.
Ex HMRC employee

Laurie

18:41 PM, 17th August 2021, About 3 years ago

Reply to the comment left by Jayemgee at 13/08/2021 - 15:44
Thanks, thats what my solicitor said, either pay cash or the 4% ADS, although if i bought 6 or more together, would be zero.

Laurie

18:44 PM, 17th August 2021, About 3 years ago

Reply to the comment left by Adrian Alderton at 13/08/2021 - 09:38
Strangely, its a grey area and different solicitors interpret the guidelines differently, so you are also right

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