HMRC has quietly changed its approach to stamp duty land tax on mixed-use property purchases to make it much more difficult to claim the (lower) Table B rates of SDLT instead of the much higher rates in Table A on the purchase of a dwelling with a large amount of land. The rates of SDLT on non-residential or mixed-use property purchases under Table B can mean an SDLT saving of up to £424,250 on the purchase of a house with land for £5m compared with the rates under Table A.
HMRC are now opening tax enquiries into SDLT claims for mixed-use and are ignoring their published SDLT guidance which says that only the land needed for the reasonable enjoyment of the dwelling is to be treated as “residential property” (SDLTM30030). Taxpayers who make a voluntary tax disclosure to HMRC are now increasingly likely to get a tax investigation.
Use this link to read Patrick’s recent article in Taxation magazine on HMRC’s change of practice: TAX_2018_Vol182_Issue4668_Oct_12