The ATT supports HMRC’s plan to crack down on SDLT avoidance when people buy residential property but is concerned that HMRC’s proposals to apportion tax for a mixed-use property will add uncertainty for the purchaser about final purchase cost and could delay the buying process and result in increased SDLT bills.
Jon Stride, co-chair of ATT’s technical steering group, said: ‘Where tax depends on the apportionment, the increased uncertainty over the SDLT figure at the start of the process may affect buyers if the final apportionment results in a charge significantly greater than that budgeted for’ which might lead to ‘a risk of additional SDLT and penalties because of disagreements over valuation’ and the likely impact on the mortgage application process if the SDLT figure is larger than expected.
On the proposals for multiple dwelling relief, the ATT is supportive of an option whereby part of a building, or a building within the grounds of another dwelling, would not count as a separate dwelling for the purposes of MDR unless its value is a third or more of the total price attributable to the property as a whole. There is a concern that groups such as disabled individuals looking for separate accommodation for carers or those looking to care for older relatives in a ‘granny annexe’ who genuinely need a property which includes a subsidiary dwelling might be disadvantaged by this move. ‘The government may want to consider some specific policy for specific vulnerable groups who would benefit from owning property with a subsidiary dwelling,’ says Jon Stride.
The ATT supports HMRC’s plan to crack down on SDLT avoidance when people buy residential property but is concerned that HMRC’s proposals to apportion tax for a mixed-use property will add uncertainty for the purchaser about final purchase cost and could delay the buying process and result in increased SDLT bills.
Jon Stride, co-chair of ATT’s technical steering group, said: ‘Where tax depends on the apportionment, the increased uncertainty over the SDLT figure at the start of the process may affect buyers if the final apportionment results in a charge significantly greater than that budgeted for’ which might lead to ‘a risk of additional SDLT and penalties because of disagreements over valuation’ and the likely impact on the mortgage application process if the SDLT figure is larger than expected.
On the proposals for multiple dwelling relief, the ATT is supportive of an option whereby part of a building, or a building within the grounds of another dwelling, would not count as a separate dwelling for the purposes of MDR unless its value is a third or more of the total price attributable to the property as a whole. There is a concern that groups such as disabled individuals looking for separate accommodation for carers or those looking to care for older relatives in a ‘granny annexe’ who genuinely need a property which includes a subsidiary dwelling might be disadvantaged by this move. ‘The government may want to consider some specific policy for specific vulnerable groups who would benefit from owning property with a subsidiary dwelling,’ says Jon Stride.
