Q&As

When claiming multiple dwellings relief for stamp duty land tax for a property with a main house and a granny annex within the same grounds, if the granny annex is ‘subsidiary’ to the main dwelling under section 128(5) of the Finance Act 2016 does the higher 3% rate apply?

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Produced in partnership with Mary Ashley of Old Square Tax Chambers
Published on LexisPSL on 08/07/2020

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

  • When claiming multiple dwellings relief for stamp duty land tax for a property with a main house and a granny annex within the same grounds, if the granny annex is ‘subsidiary’ to the main dwelling under section 128(5) of the Finance Act 2016 does the higher 3% rate apply?

When claiming multiple dwellings relief for stamp duty land tax for a property with a main house and a granny annex within the same grounds, if the granny annex is ‘subsidiary’ to the main dwelling under section 128(5) of the Finance Act 2016 does the higher 3% rate apply?

Where a person is purchasing a property which contains a main house and a granny annex then in establishing whether the higher 3% rates apply, it is necessary to consider the specific provisions in paragraph 5 of Schedule 4ZA to the Finance Act 2003 (FA 2003).

If an individual purchaser acquires a major interest in two or more dwellings in one transaction the higher 3% rates apply where at least two of the dwellings acquired satisfy the following conditions:

  1. the chargeable consideration attributable to the dwelling is £40,000 or more (apportioned on a just and reasonable basis) (Condition A)

  2. the purchased interest is not subject to a long lease (unless that lease has an unexpired term of 21 years or less) (Condition B), and

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