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HMRC internal manual

Stamp Duty Land Tax Manual

HM Revenue & Customs
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Relief for transfers involving multiple dwellings: Example 8

The purchase is a relevant transaction as it involves the acquisition of more than one dwelling - i.e. the eight flats. The rate of tax is set by the total consideration given, divided by the number of dwellings. This is £125,000. As the 0% band does not apply under the relief, the rate of tax is 1%.

The grant of the leases is not an event which requires recalculation of the tax due, even though it occurs within the “relevant period” following the original purchase. Neither does it bring that period to an end as the whole of the interest acquired in that purchase has not been disposed of.

The combination of the six remaining flats to make three also takes place within the relevant period. This is a relevant event for the purposes of para. 6 so a recalculation is required. The event is deemed to have occurred immediately before the original purchase.

The rate of tax is now set by the original consideration of £1 million, divided by five - that is, the three combined flats and the two in respect of which leases were granted. The result is £200,000 so the rate of tax is still 1% and the amount of tax due is unchanged. No further return is required.