Additional Dwelling Supplement (ADS) payable on multiple purchases under £40k?
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
4 comments on this article
Learn from your peers’ experience
A different perspective could help you spot an issue, avoid a mistake or find a better way forward. Read the comments and add your own views if you wish.
Member Since December 2014 - Comments: 52
9:38 AM, 13th August 2021, About 5 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
Member Since April 2020 - Comments: 8
3:44 PM, 13th August 2021, About 5 years ago
The proble is the one mortgage and so 4% is due.
Ex HMRC employee
Member Since January 2016 - Comments: 33
6:41 PM, 17th August 2021, About 5 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.
Member Since January 2016 - Comments: 33
6:44 PM, 17th August 2021, About 5 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