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  • Tax

    SDLT Relief - please explain

    I am planning a scenario of somewhere to live plus a second property for income. I won't make any decisions without advice from an accountant but am trying to understand the options to discuss. I had accepted that the government imposes an additional 3% SDLT on additional properties, but it appears there are exceptions to this that have been touched on in another thread.

    https://www.propertytribes.com/sdlt-reli...29342.html

    Documents I have read and quite likely misunderstood:

    https://www.gov.uk/guidance/stamp-duty-l...ansactions

    https://www.gov.uk/hmrc-internal-manuals...sdltm21010

    Scenario 1 -  I buy an additional investment property, say 1 freehold dwelling, split into 2 or 3 flats for £200k, I can pay £7.5k SDLT or claim Relief for Multiple Dwellings and reduce this to £6k. What if I decide this property alone is sufficient for me and buy it to live in 1 flat and rent out the other 1 or 2; Do I pay 2% of the total property value above £125k as my residential property or do I pay 3% of the value of the rented flat(s) as investment properties?

    Scenario 2 - I buy a property with planning permission to build a 2nd, new, individual property within the grounds. It appears I can claim relief as a building company buying an individual's home, if I buy the home of the person I sell this new property to. I can see how this is an incentive for large scale developers to shift new builds but is it also available to 1 person as a sole trader or limited company? Is this only relief on the additional 3% or is it full relief of SDLT? Would this apply if one property is developed into multiple units e.g. a single property converted to retirement flats?

    Scenarios 3 and 4 - SDLT relief when buying from the representatives of a deceased person or buying from an employee who is relocating.

    • Mrs Smith dies and her family want to sell her property. Is SDLT relief available if I offer to buy the property from the representatives?
    • Bill works for me, say as a builder, and needs to sell his house due to a change in circumstances. Is SDLT relief available if I offer to buy the property from Bill? Bill is likely to be self employed, does the situation change if I employ Bill on a zero hour contract while he needs to sell his property?

    If relief is available, is it only the additional 3% or full relief?

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