»Ê¹ÚÌåÓýapp

»Ê¹ÚÌåÓýapp freehold of a building divided into six flats is purchased for £1.2 million and relief is claimed. »Ê¹ÚÌåÓýapp flats are let on Assured Shorthold tenancies but, two years later, the tenancies cease and the purchaser begins work to convert the building into a hotel.

At the time of purchase, the transaction is a relevant transaction as it involves the acquisition of more than one dwelling - i.e. the superior interest in six flats where the term of the lease is 21 years or less. »Ê¹ÚÌåÓýapp rate of tax is set by the total consideration given, divided by the number of dwellings. »Ê¹ÚÌåÓýapp 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.

When conversion work starts (within three years of the effective date of the transaction), the flats cease to be suitable for use as dwellings. »Ê¹ÚÌåÓýapp change is deemed to have taken place immediately before the purchase so the transaction ceases to be a relevant transaction. »Ê¹ÚÌåÓýapp rate of tax is now set solely by the consideration given. »Ê¹ÚÌåÓýapp subject-matter of the transaction is now non-residential

»Ê¹ÚÌåÓýapp purchaser is required to make a further return and pay additional tax within 30 days of conversion work starting.