SDLT on Private Purchase of two properties to be combined to one?

SDLT on Private Purchase of two properties to be combined to one?

9:11 AM, 22nd February 2022, About 2 years ago 3

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We have a portfolio of properties rented out and are buying 2 attached cottages to make 1 private residence (the cottages are on separate deeds being purchased from the same seller). We are selling our main residence to fund the purchase.

We are being told various amounts of what SDLT is due because of purchasing 2 properties, albeit that they will be made into one dwelling.

The total price for the 2 properties is £650,000
To my mind, multiple property relief should be applicable ie £650000 divided by 2

SDLT on £325000 is £6250
Multiple by 2 (number of properties)
Total sdlt due £12500

Any thoughts are greatly appreciated
Regards Terry

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Mark Smith Head of Chambers Cotswold Barristers

11:02 AM, 22nd February 2022, About 2 years ago

But if you make the 2 dwellings into one in the three years subsequent more SDLT is due based on the tax for a single dwelling.


12:24 PM, 22nd February 2022, About 2 years ago

Reply to the comment left by Mark Smith (Barrister-At-Law) at 22/02/2022 - 11:02Wouldn’t the buyer need to pay the additional 3% on one of the two purchases? I can’t imagine HMRC would allow two main residence purchases at the same time?

Alan Veal

17:05 PM, 14th April 2022, About 2 years ago

As buyer and seller are the same this is classed as a linked transaction (even if you purchase 1 unit years later). SDLT is calculated on the combined total. Check out linked transactions on the website. I'm not sure how you could avoid additional residence 3% unless merging titles to create single dwelling would allow rebate to be claimed (similar to what you can claim when selling home after purchasing a new one).

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