HMRC SDLT: Abolition of Multiple Dwellings Relief for SDLT from 1 June 202

Abolition of Multiple Dwellings Relief for SDLT

Multiple Dwellings Relief (MDR) for Stamp Duty Land Tax (SDLT) is abolished for transactions effective on or after 1 June 2024. However, MDR is still available for contracts exchanged on or before 6 March 2024, provided the transaction is not excluded. Purchasers must include the exchange date on their return to claim MDR. Transactions are excluded if there are contract variations or assignments after 6 March 2024, or if certain rights are exercised post this date. If exclusions apply, completion must occur before 1 June 2024 to qualify for MDR.

  • MDR is abolished for transactions effective from 1 June 2024.
  • Contracts exchanged on or before 6 March 2024 may still qualify for MDR.
  • Purchasers must declare the exchange date on their tax return.
  • Exclusions include contract variations or assignments after 6 March 2024.
  • Completion must occur before 1 June 2024 if exclusions apply.
  • Example: A contract exchanged on 4 March 2024 remains eligible unless varied after 6 March 2024.

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SDLTM29902 – Abolition of Multiple Dwellings Relief for SDLT

The Multiple Dwellings Relief (MDR) for Stamp Duty Land Tax (SDLT) will no longer be available for land transactions that have an effective date on or after 1 June 2024. However, there are some important rules regarding transactions that have contracts exchanged by 6 March 2024.

Understanding Multiple Dwellings Relief (MDR)

MDR allows buyers to pay less stamp duty when buying multiple dwellings in one transaction. Before considering whether you can claim this relief, it is essential to be aware of the relevant dates and conditions surrounding it.

Key Dates

  • The contract must be exchanged on or before 6 March 2024 for purchasers to qualify for MDR.
  • The transaction can be completed after 1 June 2024 but still remain eligible for relief, provided the contract was correctly exchanged before the cut-off date.

Requirements for Claiming MDR

If you have exchanged contracts by 6 March 2024, you need to ensure that the date of exchange is included in your SDLT return. This is in addition to the completion date. If you do not provide the contract exchange date, your MDR claim will be denied.

Exclusions from MDR

There are specific situations that can make a transaction ineligible for MDR. A transaction will be excluded if:

  • There is a variation of the contract or an assignment of rights under that contract after 6 March 2024.
  • The transaction occurs after 6 March 2024 due to the exercise of an option, a right of pre-emption, or something similar.
  • After 6 March 2024, there is an assignment, sub-sale, or another transaction related to any part of the contract, allowing someone other than the original purchaser to request a conveyance.

Transactions that fall under these exclusions must still complete before 1 June 2024 to qualify for MDR.

Examples of MDR in Practice

Example 1: Eligible Transaction

Imagine that on 4 March 2024, an individual exchanges contracts to buy two dwellings that qualify for MDR. The actual completion of the sale takes place on 4 June 2024.

  • Between the exchange and completion, nothing occurs that would exclude the transaction from MDR.
  • Because the contract was in place before the cut-off date of 6 March 2024 and has not undergone any changes, it remains eligible for MDR.

In this case, it doesn’t matter that the completion happened after 1 June 2024; the transaction is still valid for MDR relief.

Example 2: Excluded Transaction

Let’s say on 4 March 2024, another individual exchanges contracts to buy two dwellings for which MDR could be claimed. However, they do not complete the sale until 4 June 2024.

On 4 April 2024, the contract is changed to modify the purchase price, which introduces an exclusion because it constitutes a variation of the contract after 6 March 2024.

  • The contract exchange was done on or before 6 March 2024, but since there was a change made to the contract after the cut-off date, the transaction becomes excluded from MDR.
  • Since the completion occurs on or after 1 June 2024, this transaction does not qualify for MDR relief.

Importance of Correctly Noting Dates

When dealing with land transactions for multiple dwellings, properly recording and submitting the correct dates is vital. Failing to include the date of exchange can result in losing the relief, which could mean paying significantly more in stamp duty than necessary.

Final Thoughts on MDR Eligibility

While accessing MDR can reduce stamp duty fees, navigating the rules is essential. Pay attention to the dates, variations in contracts, and any potential exclusions. If you follow these guidelines, you can ensure that you stay eligible for MDR up until the deadline.

Resources and Further Information

For more information and to stay updated on changes regarding the Multiple Dwellings Relief, always refer to HMRC resources. Additionally, consider legal advice or guidance from professionals specialising in property transactions to navigate complex situations.

If you would like to learn more about specific cases or scenarios regarding stamp duty land tax and multiple dwellings relief, visit here.

Useful article? You may find it helpful to read the original guidance here: HMRC SDLT: Abolition of Multiple Dwellings Relief for SDLT from 1 June 202

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