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HMRC internal manual

Stamp Duty Land Tax Manual

Scope: when is Stamp Duty Land Tax (SDLT) chargeable: higher rate charge for acquisitions of residential property by certain non-natural persons FA03/S55/SCH4A: Multiple Dwellings Relief FA03/S58D/SCH6B

A higher threshold interest which is subject to the 15 per cent rate cannot be part of a claim to multiple dwellings relief (MDR), nor can it count as one of the number of ‘total dwellings’ for establishing the amount of tax chargeable for the purposes of FA03/SCH6B/PARA5.

A multiple dwellings relief (MDR) claim may be made in respect of interests in dwellings which are not subject to the 15 per cent rate. This includes interests which qualify for exclusion from the 15 per cent rate under FA03/SCH4A/PARAS 5-5F.

A withdrawal of relief under FA03/SCH4A/PARAS5G-5K will be an event for the purposes of FA03/SCH6B/PARA6 (adjustment for change of circumstances). In this case the relief will need to be recalculated and a further return or returns submitted in accordance with FA03/SCH6B/PARA6 (see SDLTM29965).

Examples

  1. On 1 June 2015 a company purchases a chargeable interest in a dwelling for occupation by a non-qualifying individual. The interest costs £1 million. At the same time, and in the same transaction, it also purchases five other dwellings each with an attributable cost of less than £500,000. The higher rate charge of 15 per cent applies to the higher threshold interest and the acquisition of this interest must be returned separately. A claim to MDR can be made in respect of the five other dwellings as the 15 per cent higher rate charge does not apply to them.
  2. On 1 February 2015 a company purchases a farm for £3 million. The farmhouse and its garden have an attributable cost of £800,000 and there are five other dwellings on the land with a total attributable cost of £1 million. The agricultural buildings and land have an attributable cost of £1.2 million. The farmhouse is excluded from the higher rate charge as it forms part of the land and is occupied for the purposes of the farming trade. A claim to MDR can be made in respect of the six dwellings including the farmhouse.