Stamp Duty on 2x terrace house BTL

[AnimalMother]

Im just about to exchange on a purchase of number 1 & 2 terrace houses, obviously attached. They are also from the same vendor.


My solicitor has told me they will be seen as one house for the stamp duty calculation. For example, instead of being two transactions for £150k and £3800 on each house, total £7600. It will be stamp duty on £300K, £12,800.

Surely this isn't correct?

The terraces are not one house that has been split into two. They are 100% two terraced houses.

[Eric Mc]

Sounds odd to me.

[essayer]

https://www.gov.uk/guidance/sdlt-linked-purchases-...

"When 2 or more property transactions involve the same buyer and seller, they count as ‘linked’ for SDLT. HM Revenue and Customs (HMRC) may count people connected to a buyer or seller as being the same buyer or seller."

[Ozzie Osmond]

How many sales is the seller making, one or two? Not "How many houses is he selling?", but "How many contracts is he entering?"

What is absolutely certain is that you're not allowed to avoid Stamp Duty by splitting one transaction into smaller parts.

....and it's a useful link from essayer above.

[AnimalMother]

essayer said:

https://www.gov.uk/guidance/sdlt-linked-purchases-...

"When 2 or more property transactions involve the same buyer and seller, they count as ‘linked’ for SDLT. HM Revenue and Customs (HMRC) may count people connected to a buyer or seller as being the same buyer or seller."

Thanks! After reading that it looks like his advise is correct.

Disappointing.....

[essayer]

I guess it is a 'land tax'. Otherwise we could all buy land in parcels of £50k and pay no stamp duty

[Muncher]

AnimalMother said:

Thanks! After reading that it looks like his advise is correct.

Disappointing.....

Yes, he's correct, the transactions are linked so you will have to cough up more SDLT unfortunately.

[AndrewEH1]

Get the other half to buy one? Or is that too simplistic in the eyes of HMRC?

[Rangeroverover]

same thing here, just sold 3 hmo terraces for a total of £1m (for a client), all one transaction for stamp duty

you can assign different values to each one in case you are likely to sell one first to make CGT situation better

[AnimalMother]

AndrewEH1 said:

Get the other half to buy one? Or is that too simplistic in the eyes of HMRC?

"HM Revenue and Customs (HMRC) may count people connected to a buyer or seller as being the same buyer or seller."

I think they've covered that sort of thing. I did wonder about buying one in my name and one in my LTD company name. But I think they'd take a "dim view" as accountants like to say, also due to mortgage interest relief it may not be worth it in the long run.

[AnimalMother]

Rangeroverover said:

same thing here, just sold 3 hmo terraces for a total of £1m (for a client), all one transaction for stamp duty

you can assign different values to each one in case you are likely to sell one first to make CGT situation better

ouch! Was that after 1st of April?

[BoRED S2upid]

Can't you just buy one this month and the other next month?

[Eric Mc]

You could - but you can still fall foul of the "linked transaction" definition. If they were genuinely two separate sales, then all the paperwork , contracts etc would have to show categorically that they really were independent of each other. In reality, that would be very hard to show if you were negotiating to buy two or more properties at the same location in or around the same time using the same agents, solicitors etc.

[Muncher]

BoRED S2upid said:

Can't you just buy one this month and the other next month?

They can be linked even over a year apart.

[Ozzie Osmond]

Which essentially brings us back where we started. Is the sale fundamentally "a package of two houses" or not? [And see also the "same seller to same buyer" rule.]

It's not unusual at auction to find, say, the two halves of a semi up for auction on the same day as consecutive but separate lots in the auction. If you bought both they would have to notbe added together for stamp duty.

Edited by Ozzie Osmond on Saturday 11th June 09:55

[Muncher]

They would be linked.

[Ozzie Osmond]

Interesting. I can see that it's strictly what the "same seller to same buyer" rule says, with the open market independence of the auction room ignored.

[Alpinestars]

You should also consider whether Multiple Dwellings Relief is available.

[AnimalMother]

Alpinestars said:

You should also consider whether Multiple Dwellings Relief is available.

Now that post might have saved me the cost of a new small hatch back! Thank you very much!


My solicitor isn't convinced....yet, he thinks Multiple Dwellings Relief is for 6 or more only. But Im 99% sure he is wrong this time.

Useful example here:

http://www.taxation.co.uk/taxation/Articles/2015/0...


EDIT: He has now changed his mind and Multiple Dwellings Relief is available! Result, it works out nearly to the penny the same as being two separate transactions. :-)

Edited by AnimalMother on Tuesday 14th June 12:30

[Alpinestars]

AnimalMother said:

Now that post might have saved me the cost of a new small hatch back! Thank you very much!


My solicitor isn't convinced....yet, he thinks Multiple Dwellings Relief is for 6 or more only. But Im 99% sure he is wrong this time.

Useful example here:

http://www.taxation.co.uk/taxation/Articles/2015/0...


EDIT: He has now changed his mind and Multiple Dwellings Relief is available! Result, it works out nearly to the penny the same as being two separate transactions. :-)

Edited by AnimalMother on Tuesday 14th June 12:30

Glad he's realised his error and you can buy me a drink .