Relief for transfers involving multiple dwellings: Example 2
The freehold of a block of 10 flats is purchased for £1.4 million. There is no headlease but five flats are let on 99-year leases.
The transaction is a relevant transaction for the purposes of the relief as it involves the acquisition of more than one dwelling - i.e. the five untenanted flats. The freehold is treated as if it were interests in the individual dwellings. The chargeable consideration is apportioned between the five untenanted flats (£1,250,000) and the five tenanted flats (£150,000).
The rate of tax on the consideration attributed to the untenanted flats is set by the amount of that consideration divided by the number of dwellings concerned, the tax should be calculated and this figure is then multiplied by 5to give the total amount of SDLT payable.
The higher rate for additional dwellings will be applicable. More information about the higher rate can be found at SDLTM09730. The rate of tax on the consideration attributed to the tenanted flats is set by the chargeable consideration for the transaction (£1.4 million). As the transacation involves six or more dwellings, it can be treated as involving non-residential property, see section116(7) Finance Act 2003.