Examples of SDLT Multiple Dwellings Relief Abolition and Transitional Rules

SDLT linked transactions after the end of multiple dwellings relief

When a property deal spans the abolition of multiple dwellings relief (MDR), the SDLT position for later completions depends on whether they are still treated as linked to earlier ones. HMRC’s examples show that this can affect the rates used, whether a fresh nil rate band is available, and whether extra SDLT returns or amendments may be needed.

• If an earlier transaction completed before abolition qualified for and used MDR, HMRC says a later post-abolition transaction may be treated as not linked and taxed separately.
• If the earlier pre-abolition transaction did not qualify for MDR, later transactions usually remain linked, so SDLT is recalculated across the total consideration and only one nil rate band applies.
• For mixed-use purchases, the outcome can differ depending on whether MDR was claimed before abolition or whether non-residential rates apply across linked transactions.
• For purchases of six or more dwellings, buyers may be able to use the non-residential rates rule instead, but this can change whether later transactions are linked and whether a second nil rate band is available.
• If a later linked transaction increases the SDLT due on an earlier one, a further return may be required, and an earlier return may sometimes be amended if still within the time limit.

Scroll down for the full analysis.

SDLT after the abolition of multiple dwellings relief: how the linked transaction transitional rules work

This page explains HMRC’s examples on what happens when a land deal spans the abolition of multiple dwellings relief (MDR) for SDLT. The key issue is whether later transactions are still treated as linked to earlier ones, and that can change both the tax rates used and whether a second nil rate band is available.

What this rule is about

Before MDR was abolished, a buyer acquiring more than one dwelling in a transaction, or in linked transactions, could in some cases claim MDR. Where a deal straddles the abolition date, some transactions may complete before abolition and others after it.

The transitional question is important because linked transaction treatment normally means the SDLT on later transactions is calculated by looking at the total consideration across the linked purchases. That often prevents a buyer from using a fresh nil rate band on the later purchase.

HMRC’s examples show that the answer depends heavily on whether MDR was available, or claimed, for the earlier part of the deal, and whether the later transaction falls instead into another charging rule such as mixed-use or the “6 or more” rule.

What the official source says

The official material gives four examples.

First, where an earlier pre-abolition transaction qualified for MDR and a later post-abolition transaction would otherwise have been linked to it, the later transaction is treated as not linked to the earlier one. MDR cannot be claimed for the later transaction, but it is taxed on its own. HMRC says this means the buyer gets a full nil rate band on the later transaction.

Second, where the earlier pre-abolition transaction did not qualify for MDR, a later post-abolition transaction remains linked to it. In that case the linked transaction rules in section 55(1C) FA 2003 apply, and the tax is recalculated across the earlier and later transactions using the residential rates in Table A, taking account of any surcharge such as the higher rates for additional dwellings. Only one nil rate band applies across the linked transactions. If the later transaction increases the tax due on the earlier one, a further return may have to be filed under section 81A FA 2003.

Third, for mixed-property transactions, HMRC shows two possible approaches. If MDR is claimed on a pre-abolition mixed transaction, the post-abolition transaction is treated as not linked to the earlier ones and is taxed separately under the non-residential rates in Table B. But if no MDR claim is made, the mixed-property transactions remain linked and the non-residential rates apply across all linked transactions, with only one nil rate band across the whole set.

Fourth, where a buyer acquires 30 dwellings from the same seller as part of the same deal, with 15 completing before abolition and 15 after, there are two possible approaches. One is to claim MDR for the first 15 and treat the later 15 as not linked, with the later 15 taxed separately under the “6 or more” rule in section 116(7) FA 2003 at non-residential rates. The other is to apply the “6 or more” rule across both transactions as linked transactions, in which case only one nil rate band is available across all 30 dwellings. HMRC also notes that if the buyer wants to change approach for the earlier transaction, they may amend the earlier return if still within the amendment time limit.

What this means in practice

The examples show that abolition of MDR does not simply mean “no MDR from 1 June 2024 onwards”. It also affects whether post-abolition transactions remain linked to earlier ones.

In practical terms, there are three broad possibilities.

One possibility is that the earlier transaction was within MDR. In HMRC’s examples, that can break the link for the later post-abolition transaction. The later transaction is then taxed separately, which may be beneficial because a fresh nil rate band becomes available.

Another possibility is that the earlier transaction was not within MDR. In that case the normal linked transaction rules may continue to apply, so the later transaction can increase the SDLT on the earlier one and no second nil rate band is available.

A third possibility is that another rule applies instead, especially for mixed-use property or purchases of six or more dwellings. In those cases, the buyer may need to decide which route to take for the earlier transaction, because that choice can affect whether later transactions are treated as linked and which rates apply.

This matters for buyers, conveyancers and advisers because the tax result can differ significantly depending on how the earlier return was completed and whether an amendment is still possible.

How to analyse it

A sensible way to analyse a deal that spans the abolition date is to ask the following questions.

• Are the transactions linked in the ordinary SDLT sense, meaning they are with the same seller and form part of the same scheme, arrangement or series of transactions?
• Which transactions completed before abolition and which completed after?
• Did any pre-abolition transaction qualify for MDR?
• Was MDR actually claimed on the earlier transaction where that was possible?
• Is the later transaction residential only, mixed-use, or a purchase of six or more dwellings so that section 116(7) may apply?
• If the transactions remain linked, does the later completion increase the SDLT due on the earlier one, creating a need for a further return under section 81A?
• If more than one treatment was available for the earlier transaction, is the buyer still within time to amend the earlier return?

The source material suggests that the answer is not always automatic. In particular, mixed-use and “6 or more” cases may involve a choice of tax treatment for the earlier transaction, and that choice can affect the linked transaction analysis for the later one.

Example

Illustration: a buyer agrees to buy several properties from the same seller as part of one overall deal. One dwelling completes in March 2024. Two more dwellings complete in June 2024.

If the March purchase was only one dwelling, MDR was not available on that earlier transaction. HMRC’s example says the June purchase remains linked to the March purchase. The tax must then be recalculated using the linked transaction rules, and the buyer does not get a second nil rate band for the June completion.

By contrast, if the March transaction had itself involved two dwellings and MDR was claimed then, HMRC’s example says the June transaction is treated as not linked to the March one. The June transaction is taxed on its own, and the buyer gets a full nil rate band for that later transaction.

Why this can be difficult in practice

The difficult part is that the result depends not just on whether transactions are linked in the ordinary sense, but also on how the transitional MDR rules interact with those linked transaction rules.

Mixed-property transactions are especially sensitive. A mixed-use purchase would usually be taxed at non-residential rates, but HMRC’s example shows that a buyer might instead have claimed MDR before abolition. That earlier choice affects whether a later post-abolition transaction is treated as linked or not.

The “6 or more” rule creates similar complexity. A buyer of multiple dwellings may have more than one possible route for the earlier transaction. HMRC’s example shows that changing approach later may be possible by amending the earlier return, but only if still within time. If the amendment window has closed, the practical outcome may be fixed.

Another practical difficulty is compliance. If a later linked transaction increases the tax due on an earlier one, the buyer may need to file a further return. That means the analysis should not stop once the first return has been submitted.

Finally, these examples are illustrations of HMRC’s view of the transitional rules. The precise result in a real case will still depend on the facts, including whether the transactions are truly linked and what tax treatment was available and adopted for the earlier completion.

Key takeaways

• A post-abolition transaction is not always treated as linked to an earlier one; in HMRC’s examples, prior MDR treatment can break the link.
• If transactions remain linked, SDLT may need to be recalculated across the whole set and only one nil rate band will usually apply.
• Mixed-use and “6 or more” cases need particular care because the treatment of the earlier transaction can affect the tax result for later completions.

This page was last updated on 24 March 2026

Useful article? You may find it helpful to read the original guidance here: Examples of SDLT Multiple Dwellings Relief Abolition and Transitional Rules

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