Does multiple dwellings relief apply were there is tax avoidance?

Home Forums Patrick Cannon Does multiple dwellings relief apply were there is tax avoidance?

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  • #743 Reply
    Charles
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    To all the SDLT whizzes out there. I am buying a piece of land for development, intending to build there 10 flats. I understand that the purchase of the land is not eligible for multiple dwellings relief since no construction work has yet begun. What about if I interposed a company as an intermediary purchaser, who buys the land and then sells it on to the ultimate purchaser as an off-plan sale of the 10 flats which are yet to be built (which I gather is eligible to multiple dwellings relief as per SDLTM29960). Can I claim sub-sale relief on the first transfer to enable me to claim multiple dwellings relief on the second?

    #744 Reply
    Justin Bryant
    Guest

    I think you would need to worry about the following extract from the link below:

    ?Relief is barred where it is reasonable to conclude that the transferor had a main purpose of securing a tax advantage for any person. In the definition of tax advantage, ?tax? refers only to SDLT and not other taxes.?

    http://www.hmrc.gov.uk/manuals/sdltmanual/sdltm21570.htm

    There may however be another solution that an STPG member could advise you on.

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