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3% higher rates, subsidiary dwellings and interaction with MDR


Achieve significant SDLT savings for your clients

In June 2016, Colleen and Paul purchased their dream home in the countryside. The main building was a large detached farmhouse that had been recently restored. There were a number of outbuildings within the grounds of the property, including one which had a suite of fully functioning kitchen and bathroom facilities, together with bedroom and living areas.

The property cost £750,000 and the couple duly paid SDLT of £27,500. The property was the couple’s first purchase, so the 3% surcharge did not apply.


  • Following a review, Moore NI concluded that the outhouse with separate functioning facilities fell within the definition of a ‘dwelling’ for the purposes of the SDLT legislation.
  • Therefore, a claim for Multiple Dwellings Relief (MDR) could have been claimed on the original property purchase in 2016.
  • In addition, as the outhouse fell within the definition of a ‘subsidiary dwelling’ for the purposes of the 3% surcharge, the transaction did not attract the higher rates of SDLT.
  • If the couple had have claimed MDR on the original purchase, the SDLT would have been £17,500: a saving of £10,000.
  • An amendment can be made to the SDLT return within 12 months of the filing date.
  • However, a refund can still be claimed if too much SDLT has been paid, even after the expiry of the 12-month amendment window. The deadline for claiming back overpaid tax is four years from the effective date of the transaction.

After being engaged by Colleen and Paul, Moore NI undertook a detailed review of their case, concluding that a claim for MDR would have provided an SDLT saving of £10,000.

Although, the couple were outside the window to amend the original SDLT return, Moore assisted with the reclaim process, ultimately resulting in the repayment of the overpaid tax.

In cases involving a number of properties, within the same grounds or, indeed, within the same building, specialist advice should be sought as significant savings can often be achieved.

If you have any queries around SDLT please do not hesitate to get in contact via our SDLT Advisory Service.

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