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 A year 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



Comments

Adrian Alderton View Profile

9:38 AM, 13th August 2021, About A year 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 A year ago

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

Laurie

18:41 PM, 17th August 2021, About A year 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 A year 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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