Land Registry<\/a> records for property purchases of the types of property that are frequently converted into multiple dwellings. These might typically be large terraced town houses which are often split into separate flats. Those firms are then mailing the purchasers recommending that they make MDR claims on a no-win-no-fee basis.<\/p>\nIf you receive such a letter, I would recommend caution as there are many reasons why an MDR claim may not be applicable and may have costly\u00a0repercussions for you further down the line.<\/span><\/p>\nDistinct Separate Dwelling<\/h2>\n
For a claim to be successful, the transaction must involve more than one distinct separate dwelling. HMRC accept that a single building can contain more than one dwelling but state their view as follows:<\/p>\n
\u201cA self-contained part of a building will be a separate dwelling if the residents of that part can live independently of the residents of the rest of the building including independent access and domestic facilities\u201d.<\/p>\n
This will require an annexe say to have its own separate entrance and separate kitchen and bathroom facilities.<\/p>\n
Converting the number of dwellings<\/h2>\n
Another trap for the unwary is that if a multiple dwellings relief claim is made on a transaction and there is subsequently a change in the number of dwellings subject to the claim within a period of three years from the transaction, then there will be a claw-back of MDR claimed. If, say, a property was purchased that was separated into more than one flat with the intention of converting it back to a single property, then any Multiple Dwelling Relief claimed will have to be repaid.<\/p>\n
HMRC Enquiries into MDR claims<\/h2>\n
Finally, it should be noted that a Stamp Duty Land Tax Return is a Self-Assessment Tax Return and as such any claim is likely to be processed without a detailed initial review, but HMRC have the power to enquire into such Returns and accordingly an apparently successful claim may be challenged and fail once it has come under proper scrutiny. This might be an issue if you have already paid out on no win fee basis.<\/p>\n","protected":false},"excerpt":{"rendered":"
Increases in the rate of Stamp Duty Land Tax (SDLT) over the past few years have created a number of anomalies in the legislation which, if applicable to your circumstances, can substantially reduce the amount of SDLT payable on the purchase of a property. One such anomaly is the effect of Multiple Dwellings Relief (MDR).[…] <\/p>\n
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