Taxpayer denied £80k SDLT relief
The Upper Tribunal has dismissed an appeal on the availability of Multiple Dwellings Relief worth £80,000 on a high value property in London. Why didn’t it qualify?
Recap. When purchasing a property containing more than one dwelling, Multiple Dwellings Relief (MDR) reduces the SDLT payable by calculating the tax based on the purchase price divided by the number of dwellings. The relief is particularly valuable where a high value property has a self-contained annexe within the grounds because SDLT is charged at lower rates on cheaper properties. However, the annexe must be a separate dwelling to the main home. This means that the occupier of the annexe and the occupier of the main home must be able to live separately from each other and have sufficient privacy and security.
Reasoning. In this case, the property had an annexe with a separate doorbell and lockable doors, however it was only accessible via the main house. In addition, an occupant of the annexe using the front door would have access to each of the reception room, the study and the dining room (leading to the kitchen and bathroom) on the ground floor. Therefore, the annexe was not a separate dwelling, and the appeal was dismissed. If this annexe had a separate entrance with no access to the rest of the property, a claim for MDR may have been successful. However, there are various other factors that need to be taken into account and so the availability of MDR should be determined prior to purchase.
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