»Ê¹ÚÌåÓýapp

A purchaser acquires the freehold of a block of eight flats for £1,000,000. Six months later he grants 99-year leases of two flats to unconnected third parties. After a further six months the remaining six flats are knocked together to make three flats.

»Ê¹ÚÌåÓýapp purchase is a relevant transaction as it involves the acquisition of more than one dwelling - i.e. the eight flats. »Ê¹ÚÌåÓýapp rate of tax is set by the total consideration given, divided by the number of dwellings. This is £125,000 the 0% band does not apply under the relief and the higher rate for additional dwellings will be applicable. More information about the higher rate can be found at SDLTM09730. »Ê¹ÚÌåÓýapp non-resident rates of SDLT may also be applicable if any purchaser is not UK resident. More information about the non-resident rates can be found at SDLTM09860.

»Ê¹ÚÌåÓýapp grant of the leases is not an event which requires recalculation of the tax due, even though it occurs within the “relevant periodâ€� following the original purchase. Neither does it bring that period to an end as the whole of the interest acquired in that purchase has not been disposed of.

»Ê¹ÚÌåÓýapp combination of the six remaining flats to make three also takes place within the relevant period. This is a relevant event for the purposes of para. 6 so a recalculation is required. »Ê¹ÚÌåÓýapp event is deemed to have occurred immediately before the original purchase.

»Ê¹ÚÌåÓýapp rate of tax is now set by the original consideration of £1 million, divided by five - that is, the three combined flats and the two in respect of which leases were granted. »Ê¹ÚÌåÓýapp result is £200,000. »Ê¹ÚÌåÓýapp tax should be recalculated and if a futher amount is due the purchaser is required to make a further return and make payment within 30 days.