Home › Forums › Patrick Cannon › 3% Surcharge, MDR and Linked Transactions › Reply To: 3% Surcharge, MDR and Linked Transactions
I feel there is a point which has been missed here relating to the “subsidiary” nature of the gardener’s cottage to the main house. Let us assume what is most likely, that the cottage is worth £40,000 or more and that the house and cottage are sold in a single transaction.
Sch4ZA para 5 should not apply to incur the higher rates of SDLT because of 5(4), the cottage is subsidiary to the house. See 5(5) for the details.
So we are left looking at a para 6 charge. In the case of a property with a subsidiary dwelling the effect is to look at it for surcharge purposes pretty much as if it were a single dwelling, though the wording to achieve that is quite complex. A key point is that the exception from the surcharge for the replacement of an only or main residence is available for a para 6 case. See para 6(1)(d) explained in para 6(3) which refers one on to the usual replacement rules in 3(6) and 3(7).
Do note though that to make the replacement exception work in a multi dwelling case, the intention must be to live in the main dwelling, not the subsidiary one.
Other points arise too, but enough for this posting!