Zigurds Kronbergs, senior tax writer at Croner-i, looks at recent Tribunal decisions dismissing claims for multiple-dwellings relief from stamp duty land tax and considers ways to use the tax rules to gain advantage
Multiple dwellings relief (MDR) from stamp duty land tax (SDLT) applies where a purchaser acquires two or more dwellings in a single chargeable transaction. Because it effectively averages out the consideration over the number of dwellings purchased, it can result in considerable tax savings.
Although the intention of the relief was to encourage investment in residential property, and it is typically aimed at blocks of flats, it is perhaps not surprising that taxpayers buying expensive houses have tried to claim that parts of their properties, consisting of ‘annexes’ separable from (or even contained within) the main house, are capable of constituting separate dwellings.
A flurry of recent cases, almost all of them unsuccessful, have come before the tribunals. Before looking at them individually to see what lessons can be learned, it is worth reminding ourselves what the legislative test is.
