Read the original guidance here:
HMRC SDLT: SDLTM29903 – Abolition of multiple dwellings relief for SDLT (1 June 2024): Linked Transactions

SDLTM29903 – Ending Multiple Dwellings Relief for SDLT (Starts 1 June 2024): Linked Transactions

The removal of Multiple Dwellings Relief (MDR) begins for land transactions with an effective date of 1 June 2024 or later. For a detailed explanation of what an ‘effective date’ means, refer to SDLTM07600.

Understanding Transitional Rules for Linked Transactions

There are rules in place to manage linked transactions during this period. These rules distinguish between two types of transactions based on their timing:

• Pre-abolition transactions: These are transactions that meet one of the following conditions:
• The transaction completes, or is nearly complete, before 1 June 2024.
• Contracts are exchanged on or before 6 March 2024, as long as it is not excluded from consideration (check SDLTM29902 for exclusions).
• Post-abolition transactions: These are transactions that would have qualified for MDR but now do not because they complete or significantly progress on or after 1 June 2024.

Linking Pre-abolition and Post-abolition Transactions

When a pre-abolition transaction is linked to a post-abolition transaction, and both would have qualified for MDR if the abolition had not taken place, the following happens:

• A claim for MDR is only available for the pre-abolition transactions.
• If a claim for MDR is made regarding any pre-abolition transactions, the post-abolition transactions are treated as detached from the pre-abolition transactions.

Impact of Linked Transactions

When these transactions are linked as explained above, the rules essentially reset after the first post-abolition transaction occurs. This gives the purchaser the chance to benefit from a full nil-rate tax band. The relevant rates of Stamp Duty Land Tax (SDLT) from section 55 of the Finance Act 2003 apply, which might include any possible surcharges.

Examples of the Transitional Rules at Work

For practical insights into how these rules work, refer to SDLTM29904, which includes several examples that illustrate the interactions between linked transactions before and after the MDR abolition.

This structure aims to provide clarity on how land transactions will be handled under the new regulations and to ensure that eligible transactions do not miss out on relief available before MDR is eliminated.