UK Landlord Forum / Life

Hi All,

Here's an interesting one, at the final hour just when we are about to exchange.   

We are purchasing two flats from the same landlord.  Our solicitor has flagged that we may be liable to pay stamp duty as they might be considered Linked purchases?  Complete news to us ... ;anyone experienced this before?   reading the HMRC text below its also double dutch!


As far as we are concerned we are just purchasing two flats separately (they differ in value).  They are not going into a commercial concern, and they are unconnected. 

Advice gratefully received. 

Thanks everso


Quote from solicitor
HM Revenue and Customs (HMRC) will consider transactions to be linked if all of the following apply:

there's more than one transaction
the transactions are between the same buyer and seller or between people connected with either of them
the transactions form part of a single arrangement or scheme or part of a series of transactions
Obviously the first two are met but it is the third point which is the question.  We act as your agent and so stamp duty is your liability but of course you will base it on our advice.  As to whether it is linked is very difficult to give a straight forward yes or no but the following is quite a good guide.  It is the 2nd, 5th, 6th and 7th points that I am questioning.


HMRC text:0
If the answer to any of these questions is "yes", this is an indication that the transactions are linked.

 Are the transactions documented together at any stage of the process (i.e. contracts, conveyances, mortgage applications etc)?

 Are the transactions part of the same or simultaneous negotiations or deal?

 Is there some superior agreement, or understanding etc that results in the transactions?

 Are the transactions related by any other integral, common factor?

 Do the transactions influence the terms of another in some way?

 Is some kind of advantage or benefit obtained over and above what any third party could obtain in just one of the transactions?

 Do the transactions occur because of, or in contemplation of another?

 Do the transactions form part of any co-ordinated, artificial or non-commercial structure

I've not experienced it before but you can see the sense behind it.

If I was to buy 2 properties from anyone - like a Developer or a Landlord - then I'd be trying to get a 'bulk' deal. I realise 'bulk' isn't the correct word when the quantity is 2, but it's not a BOGOF either.

If you didn't get a better deal when buying 2, then that would also seem a bit naïve from your side and will, at the same time, be a bit difficult to prove.

I've come across this before and the implications were the same.  SD payable.

I see why they do this, and they have to be pretty tough to stop people cheating.

HOWEVER.

I would try my best to avoid it.

I would complete 4 - 6 weeks apart if I could.

I would arrange separate mortgages.

I would perhaps vary the owners, i.e. if me and the misses were buying jointly I would try and buy one in one name and one in the other.

I might even instruct two lots of solicitors to deal with each deal.

However, if I was planning on converting the two into one, I would pay the stamp duty now..

Substance over form and all that!