Q&As

A buyer is buying the freehold of a property that is comprised of a ground floor shop (subject to a long lease at a peppercorn rent) and a first floor flat. There is no value in the ground floor shop to the landlord. The price paid is to be attributed to the freehold of the flat. As the freehold is mixed use, does it avoid the 3% surcharge?

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Produced in partnership with Sean Randall of Blick Rothenberg and Mary Ashley of Old Square Tax Chambers
Published on LexisPSL on 15/04/2020

The following Tax Q&A Produced in partnership with Sean Randall of Blick Rothenberg and Mary Ashley of Old Square Tax Chambers provides comprehensive and up to date legal information covering:

  • A buyer is buying the freehold of a property that is comprised of a ground floor shop (subject to a long lease at a peppercorn rent) and a first floor flat. There is no value in the ground floor shop to the landlord. The price paid is to be attributed to the freehold of the flat. As the freehold is mixed use, does it avoid the 3% surcharge?
  • Mary Ashley of 15 Old Square
  • Sean Randall of Blick Rothenberg Limited

Mary Ashley of 15 Old Square

The higher rates of stamp duty land tax (SDLT) will apply to the purchase of a major interest in a single dwelling by an individual, if at the end of the day of purchase, conditions A–D are met:

  1. condition A—the chargeable consideration is £40,000 or more

  2. condition B—the dwelling is not subject to a lease which has more than 21 years to run on the date of purchase

  3. condition C—the purchaser owns a major interest in another dwelling which has a market value of £40,000 or more and is not subject to a lease which has more than 21 years to run at the date of purchase of the new dwelling, and

  4. condition D—the dwelling being purchased is not replacing the purchaser’s only or main residence

For further information, see Practice Note: 3 per cent higher rates of SDLT on additional residential properties.

Dwelling has been specifically defined to include:

  1. a building or part of a bu

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