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STAMP DUTY - MIXED USE - HELP NEEDED :)

hopkinsonlee
Posts: 2
Joined: Fri Oct 06, 2017 7:35 pm

STAMP DUTY - MIXED USE - HELP NEEDED :)

Postby hopkinsonlee » Fri Oct 06, 2017 7:43 pm

We currently have 3 properties, 2 buy-to-let and 1 residential which we currently live in. We are about to move into a further house which is mixed use, being part residential and part land and kennels (commercial) but all on the same plot and deeds. The new property is £375,000 but knowone not even our solicitors are sure on the stamp duty because the new house is part commercial i read that it is not subject to the extra 3% surcharge on the stamp duty as we are keeping our current residential and likely rent out. We would much appreciate any help and input on how much the stamp duty should be. Many thanks in advance

bd6759
Posts: 2284
Joined: Sat Feb 01, 2014 3:26 pm

Re: STAMP DUTY - MIXED USE - HELP NEEDED :)

Postby bd6759 » Fri Oct 06, 2017 8:32 pm

The amount paid for the dwelling will be subject to the 3% surcharge. You need to ascertain that using any just and reasonable basis.

Your solicitor should know this. Refer him to para 5(2), Sch4ZA, FA2003

SDLT Geek
Posts: 42
Joined: Sun Apr 30, 2017 5:45 pm

Re: STAMP DUTY - MIXED USE - HELP NEEDED :)

Postby SDLT Geek » Sun Oct 08, 2017 9:00 am

I do not agree with bd6759. The Sch 4ZA para 5(2) provision referred to relates to cases where what is being bought is "two or more dwellings" (para 5(1)(b)). That is not the case here. What is being bought is one dwelling with kennels.

If the property counts as mixed use, the lower Table B rates of SDLT apply and the 3% surcharge cannot apply.

To see if the property counts as mixed you need to look at the rules and practice quite closely. HMRC are tending to say now that land with a house counts as its "grounds" and so as part of the residential property unless there is actual business use going on at completion. They often ask for written evidence of actual business use up to completion and even of the buyer continuing that use afterwards.

Is this an active kennels boardings business with you buying the equipment, taking over the bookings and staff etc with the contract having the appropriate clauses used in the purchase of a business? If so, it should be quite clear cut.

The SDLT would be £8,250 on a price of £375,000 for a mixed use property.

bd6759
Posts: 2284
Joined: Sat Feb 01, 2014 3:26 pm

Re: STAMP DUTY - MIXED USE - HELP NEEDED :)

Postby bd6759 » Sun Oct 08, 2017 10:01 am

I agree. I recalled that there was a bit about apportioning and skim read it. Never a good a idea.

SDLT Geek
Posts: 42
Joined: Sun Apr 30, 2017 5:45 pm

Re: STAMP DUTY - MIXED USE - HELP NEEDED :)

Postby SDLT Geek » Sun Oct 08, 2017 6:17 pm

I expect the bit bd6759 was thinking about relates to a property already owned. Someone owning a mixed use property can still find it "counting against" him when he comes to buy a house. If the mixed use property includes a dwelling and on a just and reasonable apportionment the dwelling is worth £40,000 or more, then that dwelling will count against the person for the purposes of establishing if the higher rates of stamp duty land tax apply to the purchase. Though the buyer could still be saved by the exception from the surcharge for the replacement of an only or main residence.

hopkinsonlee
Posts: 2
Joined: Fri Oct 06, 2017 7:35 pm

Re: STAMP DUTY - MIXED USE - HELP NEEDED :)

Postby hopkinsonlee » Sun Oct 08, 2017 8:11 pm

Thank you everyone. Your comments have been very helpful


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