The rise of the stamp duty cowboys
Stamp duty’s popular sidekick, multiple dwellings relief, is in a state of flux allowing some dubious companies to take advantage.
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This is now very old news and if you want some examples see: https://www.accountingweb.co.uk/any-answers/interesting-failed-sdlt-mdr-...
Is it correct that its a REQUREMENT, for independent utilities for MDR purposes?
In CGT cases I am more used to its just one of many factors used to weigh up one dwelling vs 2, albeit a persuasive one.
Seems a tad harsh as a definition.
We built a block of 27 perfectly normal flats in 1997 (converted whisky bond) except each flat only had sub meters for gas and electric and there were main meters for the supply to us re both , we then rebilled the tenants.
Not that SDLT was on point here but they certainly had all the characteristics of flats, council tax, etc, in fact once we split the utilities in circa 2014 they each got sold as a distinct flat.
@DJKL I was thinking of a subdivided Victorian terrace. I have a client with a flat in one on a separate leasehold, separate council tax, and its been shoddily done with a single gas boiler for both flats ie the original heating was left in. it causes no end of arguments about bills, but neither party want the expense of a second supply and boiler. 2 dwellings all right someone else owns the other ones and he has been trying to buy it for years.
It does seem a tad harsh and this point was raised in a case called Wilkinson. It is an interesting read if you would like to know more.
The acceptable criteria for a dwelling is constantly increasing which is why HMRC are aggressively challenging claims.
If you look at case law the First Tier Tribunal cases tend fall down on the lack of independent control over utilities. By this I mean an annex or subsidiary dwelling does not have an internal water stop tap, gas shut off valve (if gas is supplied), separate boiler, fuse box or independent control over its heating.
Fiander is the legally binding case and it also confirms that independent control over the items above are key for a successful claim
Surely "independent control over the items above are key for a successful claim" should read "independent control over the items above increases the chances of a successful claim"?
I know of many situations which no-one (not even HMRC) would dispute are separate dwellings ... where all your listed criteria BAR ONE are met.
The exception being a Boiler which, particularly in old mansion blocks, may still be communal for heating purposes.
FWIW this is likely to dramatically increase over the next decade as Heat Pumps (air or soil based) aren't feasible per residence in many configurations.
So there are likely to be shared air-based ones for houses converted into flats - and communal soil-based ones for blocks of purpose-built flats.
Agree with all the above.
I was about to start typing 'old hat' when I saw Justin's comment ... and then decided to point out that some of the assertions seem as dubiously categoric (albeit in the opposite direction) as the claims made by promoters being rightly castigated, but ireally and DJKL beat me to it.
Anyway, it's no good telling an unrepresented taxpayer to seek out "an expert tax adviser in this area" or "a trusted adviser".
They wouldn't know where to find one + don't want to pay those fees + actively prefer to listen to the blandishments of the claim agents (nicer message).
It's a bit like those seeking a 2nd opinion in the medical fraternity - what they are actually looking for is someone to give them the opposite opinion (one they want to hear).
I'm quite surprised that HMRC feels it is only one third of MDR claims that are incorrect; those that I have seen my clients receive from such "dubious companies" have in my humble opinion been 100% incorrect... and in one notable case would have left my client with exposure to the higher rate of duty for additional property purchases!
In addition to MDR, I've also seen a couple of clients approached on the basis their new purchases are uninhabitable and therefore shouldn't be charged to the residential rates of duty... let's see how those cases pan out!