HMRC SDLT: SDLTM29835 – Conditions for claiming the relief – linked transactions FA03/SCH6ZA/PARA1(5)

Conditions for Claiming Relief on Linked Transactions

This section of the HMRC internal manual outlines the conditions under which relief can be claimed for linked transactions as per FA03/SCH6ZA/PARA1(5). It provides guidance on understanding and applying the relevant tax relief principles.

• Defines linked transactions and their implications for tax relief.
• Explains the criteria for eligibility to claim relief.
• Details the procedural steps for claiming relief.
• Offers examples to illustrate the application of these conditions.

Understanding SDLTM29835 – Conditions for Claiming Relief: Linked Transactions

When purchasing a property, it’s important to know how transactions can impact the relief you may be eligible for. This section explains the rules that apply when a dwelling purchase is linked to another transaction, which may affect the relief available.

What Are Linked Transactions?

Linked transactions refer to a situation in which multiple sales or purchases are interconnected. This typically happens when:

• Several transactions are part of a single scheme or arrangement.
• Both transactions involve the same buyer and seller, or individuals closely associated with them.

For instance, if you buy a house and as part of that deal, you also purchase adjacent land from the same vendor, these transactions may be considered linked.

Conditions for Claiming Relief

In general, if your transaction involving the purchase of a dwelling is linked to another transaction, you will not qualify for relief unless the other transaction is specifically for:

• The purchase of a garden or grounds.
• Interests or rights in the land that benefit the dwelling.

This means that if the other transaction is for something unrelated, such as furniture in the house or an unrelated property, you cannot claim relief.

Impact of Linked Transactions on Maximum Relevant Consideration

It is essential to understand how linked transactions can influence the maximum relevant consideration limit of £625,000. This limit is the threshold that determines whether you qualify for certain reliefs. If you are engaging in linked transactions, refer to SDLTM30100 for detailed guidance on how this limit applies to your case.

Examples of Linked Transactions

To clarify how linked transactions work, consider the following examples:

Example 1: Purchasing a House with Additional Land

Mr. Smith decides to buy a house that comes with a small garden. In addition, Mr. Smith purchases an extra plot of land from the same seller, which he intends to use as a larger garden. In this scenario:

• The house purchase and land purchase are linked because they are part of the same deal.
• Since the land is for the benefit of the dwelling, Mr. Smith can claim relief on the house purchase.

Example 2: Buying a House and Unconnected Items

Mrs. Jones buys a flat and also negotiates for the seller’s personal belongings, which includes furniture and appliances. In this case:

• The transactions are considered linked.
• However, because the additional items are not part of the dwelling itself (i.e., they are not land, garden, or rights associated with it), Mrs. Jones does not qualify for relief.

Identifying Connections Between Transactions

It is essential to evaluate if any connection exists between the transactions involved. This can include:

• Situations where the same parties are engaged in multiple transactions.
• Where transactions occur in close temporal proximity to one another.
• If the intent behind each transaction can be established as a part of a broader arrangement.

For example, if two family members decide to purchase properties from the same vendor simultaneously, this could be seen as linked as long as it can be shown there is a shared intention or agreement between the buyers and the seller.

Legal References and Further Guidance

To delve deeper into the legal aspects of linked transactions and your claims for relief, it’s advisable to refer to dedicated legal frameworks. A useful reference point is SDLTM29841, which outlines how linked transactions affect the maximum relevant consideration.

Final Thoughts About Relief Claims

When making a claim for relief under the Stamp Duty Land Tax (SDLT) regulations, clarity about your transactions is paramount. Ensure you keep detailed records and documentation to support your claims. It can also be helpful to seek advice from property professionals or legal experts who understand SDLT and its implications.

Contacting HMRC for Further Assistance

If you remain uncertain about your transactions or the eligibility for relief, you can contact HMRC directly for guidance. They can provide information tailored to your specific situation and help you navigate the complexities of linked transactions and SDLT relief claims.

Useful article? You may find it helpful to read the original guidance here: HMRC SDLT: SDLTM29835 – Conditions for claiming the relief – linked transactions FA03/SCH6ZA/PARA1(5)

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