Q: I buy run-down residential properties which are either substantially renovated and sold or demolished and replaced by one or more new dwellings for onward sale. Can I avoid the higher rate Stamp Duty Land Tax charge by using a separate company for each individual property purchase?



A: Guidance on the higher rate of SDLT is to be found in the HMRC Guidance Note “Stamp duty land tax: Higher rates for purchases of additional residential properties” which deals with acquisitions by both individuals and limited companies.

The title is somewhat misleading and has caused some confusion. As a general rule, the additional 3% rate applies to purchases of additional residential properties by an individual. In the case of companies, and despite the title of the Guidance Note, a residential property does not have to be an additional property for the additional 3% rate to apply. There is an exception for properties already attracting the top 15% rate.

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