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Tax Question Time – Stamp Duty Land Tax

Friday March 2017

Q. I note that the higher rate of stamp duty land tax on the purchase of additional dwellings only applies to the acquisition of a major interest. Does this mean the higher rate does not apply if I buy only a 49% share in a property? How is the tax charged if I arrange to buy 100% of a dwelling in separate tranches, each less than 50% and each less than £40,000?

A. An interest in or over land can take many different forms and does not necessarily have to be an interest in the whole of the property. The term major interest is used here to denote a freehold or a lease which had more than seven years to run when granted. The word major is not a reference to the size of a proportionate holding. So the higher rates of tax will apply to the acquisition of a 49% share in a property if all of the other conditions are met.

Buying the property in a series of small tranches will not avoid the higher rates because of the linked transactions rules.

Published form Croner Taxwise Limited

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