SDLT: Muddled guidance leads to excess tax
HMRC’s guidance is unclear on how to calculate SDLT on purchases that include both multiple dwellings relief (MDR) and surcharge rates, as Natasha Heron explains.
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I've not come across MDR before (or the MRD that keeps being mentioned in the article!), but it seems outrageous to me if I've understood correctly:
* A single house purchased for £1,948,800 (not difficult to find in London) would, by my calculation, attract SDLT of £147,606; whereas
* The block of flats in the example, purchased for the same price, attracts SDLT of only £58,464 (and that's made up entirely of the HRC with the underlying SDLT being in effect free)!
Thanks to whichever mod read my comment - and has now corrected all references in the article to MRD (who sounded like a character in a 1980's TV show)!
"This means that many taxpayers will have overpaid their SDLT liabilities as it was not clear that the 1% minimum could be met by another element of the legislation."
If you read the legislation it's not all that unclear and I'm surprised people have overpaid SDLT by not properly reading/understanding how that 1% minimum works and how it can be met by the 3% SDLT surcharge applying (and is not a 1% SDLT super-surcharge on top of that 3% SDLT surcharge).
Also, the above article is wrong re MDR at least as HMRC's guidance here is pretty clear:
https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdlt...
Also, the above article is wrong re MDR at least as HMRC's guidance here is pretty clear:
https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdlt...
Are you saying that what the article states that HMRC have agreed, is not correct, and the actual SDLT should be the higher figure, i.e. 1% plus 3% ? I must say that is how it looks to me.... the manual fairly clearly says "added to...... "