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6 flats residential building

SDLT issues buying a Freehold residential with 6 flats and leasehold structure under

Hi all,

my offer to buy the freehold of a residential building with 6 flats inside has been accepted and I'm proceeding with my property investment company. It has been a good deal on the SDLT side for my BTL business due I can apply the commercial SDLT instead of the residential rate.

Now my solicitor informed me there is a leasehold structure under the freehold with each flat subject to a 999 lease. The seller didn't reported it to me, probably because the seller is a married couple with the freehold title in the name of the husband and the leases in the hand of the wife and I'm buying anything so it isn't really relevant at the end.

My solicitor asked me now if I want to maintein the leases or to merge/surrender the leasehold titles into the freehold. Due it is a property I will use for investment (BTL) purpose I think the best would be to simplify with a merge/surrender of the leasehold titles into the freehold but I would like your opinion regarding:

1. SDLT. If I will merge/surrender the leases inside the freehold at completion is there any problem to apply the commercial SDLT rate ? The flats are still 6 but could HMRC chase we are going to reinstate the property as a single dwelling and  ask for a residential SDLT payment ? (I'm buying using a company to buy the property so it would be a mess due the 3% surcharge will apply)

2. Do you see any advantage to mantein the leasehold structure instead of merge/surrender it into the freehold ? I think it could be convenient only if I think to sell single flats in the building due I will have the leasehold title ready to transfer. Isn't it ?

I have also activated my accountant regarding this matter but the forum opinion is always interesting as second opinion.

Thank you in advance




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By zarar
16th Aug 2018 05:19

You need to appoint someone to assist with this, not ask on a free internet forum. You need proper, paid for, advice

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16th Aug 2018 06:29

marc_london wrote:

I have also activated my accountant regarding this matter

Activated carbon accountants are still the best. (Use silicon as a tool, not for advice.)

marc_london wrote:

the forum opinion is always interesting as second opinion.

I question that. For one thing (but quite an important one), the forum can never be properly activated in a situation like this due to the inherent lack of facts and absence of relevant documentation.
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16th Aug 2018 11:08

This is in fact a very simple SDLT question and (as you would expect) it makes no difference re SDLT if the titles are merged or not.

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