Read the original guidance here:
HMRC SDLT: SDLTM29821 – Conditions for claiming the relief – The purchased dwelling FA03/SCH6ZA/PARA1(2)

Conditions for Claiming Relief on the Purchased Dwelling

Understanding Single Dwellings

When it comes to claiming relief, it is essential to know that this relief applies only to the purchase of a major interest in a single dwelling. Here’s what that means:

– Single Dwelling: Relief is granted only if the property being purchased is classified as one single dwelling.
– Multiple Dwellings: If a purchase involves two or more dwellings, then relief is not available. This could apply in various scenarios, such as when buying a building that contains separate flats or houses.

It is crucial to establish whether a property is considered one dwelling or more than one. This determination is based on factual circumstances, meaning that it is not just about the arrangement of the property but also how it is classified under the law.

For further guidance on what constitutes a ‘dwelling,’ refer to SDLTM29851.

What is a Major Interest?

To qualify for the relief, the main part of the transaction must be the purchase of a major interest in a single dwelling. Here are some key points to remember:

– Major Interest Defined: The term “major interest” refers to substantial ownership rights, such as owning the freehold of a property or a long lease.
– Undivided Share: Relief can also be claimed if you possess an undivided share of a major interest in a dwelling. This means that multiple people can share ownership of a property, and each can qualify for relief based on their share.

However, it is important to note that:

– If the lease you are purchasing has less than 21 years remaining at the start of the day after the effective date of the transaction, it is not considered a major interest for the purposes of this relief. Consequently, you will not be eligible for any relief for that purchase.

You can learn more about what qualifies as a ‘major interest’ by checking SDLTM04130.

Examples to Illustrate

To clarify the concepts of single dwelling and major interest, here are a few examples:

– Example 1: You purchase a house with a freehold title. This is a single dwelling and represents a major interest. Therefore, you can claim relief.

– Example 2: You buy a flat in a block where you own the long lease, and there are still over 21 years left on it. This qualifies as a single dwelling and a major interest, making you eligible for relief.

– Example 3: You decide to buy an entire building comprising multiple flats. Since the purchase involves more than one dwelling, you cannot claim relief.

Important Considerations

When submitting a claim for relief, keep the following points in mind:

– Accuracy: Make sure that your declaration of what you are purchasing is accurate. Incorrect information could affect your ability to claim relief.

– Property Documentation: Ensure that all property documents clearly define the nature of the dwelling and your interest in it. This will support your claim for relief.

– Consultation: If you’re unsure whether your purchase qualifies, consider consulting a professional. They can provide detailed insights into your specific situation.

Further Reading

To dive deeper into related matters, you may want to refer to additional resources, including:

– SDLTM29851 – To understand the legal definition of ‘dwelling.’

– SDLTM04130 – For a detailed definition of ‘major interest.’

By being informed about the criteria for claiming relief, you can navigate property transactions with confidence and ensure that you do not miss out on any benefits you may be entitled to.