£18m SDLT saving?
The FT has noted a potential significant saving on the purchase of a mansion bought alongside five other properties which may have reduced the SDLT from a top residential rate of 17% (for UK tax resident taxpayers) to a top rate of 5% for commercial property purchases.
Section 116(7), Finance Act 2003: Where six or more separate dwellings are the subject of a single transaction, they must be treated as non-residential property if Multiple Dwellings Relief (relief abolished with effect from 1 June 2024) is not claimed.
The original draftsman of the legislation may well have been thinking of the farm house accompanied by tenanted cottages used by the farmworkers, or a property developer buying a number of units with a view to redeveloping and selling or leasing the newly developed housing stock.
In my view there is an argument for retaining the relief but introducing a business purpose test.
Subcribe to news and viewsSuneil Setiya, co-founder of trading firm Quadrature Capital, bought a £275mn mansion in Chelsea from property tycoon Nick Candy and his former wife, the FT reported in April.
https://www.ft.com/content/1ca67e27-b6b6-454a-8d37-b957835201d7?shareType=nongift
