Gerry Surtees Chartered Tax Adviser

Gerry Surtees updates us on HMRC’s consultation on SDLT and our response to them.

HMRC have recently opened a consultation into two aspects of SDLT, one of which is Multiple Dwellings Relief and the other relates to ‘mixed use’ properties where it may be argued that the lower non-residential rates of SDLT could apply.

This consultation could have profound effects on the availability of reliefs in the future, and as this is a particular area of interest to our clients, we have responded to HMRC’s consultation with a detailed letter responding to their questions/proposals, in an effort to shape HMRC’s approach to any changes to the law.

What is SDLT?Stamp Duty Land Tax (‘SDLT’) is payable on most purchases of residential or commercial property, and several clients have benefited from the currently favourable rules where a house is purchased with a separate annex or ‘granny flat’ to achieve significant savings and assist with the cost of a property that may be used to house elderly relatives, etc.  This is known as Multiple Dwellings Relief and is currently available where a property purchase includes two or more separate dwellings, subject to a number of conditions being met.

What does the consultation cover?The consultation on potential changes is in respect of two particular aspects of SDLT, Multiple Dwellings Relief, and Mixed-Use Properties. Both of these aspects of SDLT have been beneficial to clients, and any change could have a negative impact on future property purchases if the law is changed.

Why are they concerned? HMRC are concerned that the reliefs are being abused to obtain tax savings in circumstances where this was not intended. There has been a string of recent cases in the courts where taxpayer claims have been struck down.  As a result, HMRC are consulting on how to reduce this perceived abuse of the rules and consequent loss of tax.

This consultation could have a profound effect on the availability of reliefs in the future, and as this is a particular area of interest to our clients, we have written a detailed letter to HMRC responding to their questions and proposals and seeking to shape HMRC’s approach to any changes to the law.

What have we said?

The proposals for changes to the mixed-use property rules are broadly sensible, but unfortunately for Multiple Dwellings Relief they are less so, and if implemented would severely curtail the usefulness of this relief.  These are in the form of four options:

Options 1 and 2 - would limit Multiple Dwellings Relief to business purchases only, removing its availability entirely for purchase of private properties, even though by their own admission, there are advantages to the government in provision of at-home care of the elderly, augmenting the national housing stock and saving the costs of government-provided care.

Option 3 - is an attempt at a provision for the at-home care scenario, but in practice we believe would deny the relief in the very circumstances where it is most helpful.

Option 4 - limits the relief to purchases including 3 or more dwellings, rather than 2 or more as at present.  This seems to be the worst of all options, precluding relief for small business purchasers and for most ‘house and annex’ purchases as well.

We have made it clear in our letter to HMRC that we feel none of their options are appropriate, and have included some constructive alternative suggestions as to how they might address their concerns in a way that preserves the usefulness of the relief. 

We are hopeful that our response will be carefully considered by HMRC before any changes are implemented. 

If you would like more information on how we could help you and your business, contact us at or call 02476673160.

Please note: This article is provided for information only and was correct as at time of writing (25/02/22). Any lists and details provided above are not exhaustive and are not intended to be full and complete guidance.  No action should be taken without consulting detailed legislation or seeking independent professional advice. Therefore no responsibility for loss occasioned by any person acting or refraining from action as a result of the material contained in this article can be accepted.