Question:
I am purchasing a property of more than £950,000 and will therefore be liable for 10% stamp duty land tax on a proportion of the cost. I have been researching the ‘dual use’ loophole where property that can be used as a dwelling as well as another use is exempt from the 10% rate (the 5% rate applies instead) but I can't find anywhere a list of acceptable dual uses. For example, would renting out the garage to someone to park a car be an acceptable ‘dual use’?
Arthur Weller replies:
Unfortunately, if you look at www.hmrc.gov.uk/manuals/sdltmanual/SDLTM00365.htm you can see that HMRC will not accept your 'dual use' loophole. Even if you would find an acceptable use for part of the property that would enable it to be classified as non-residential, the value of the remaining part of the house that is residential would still be liable to stamp duty land tax at residential rates - see www.hmrc.gov.uk/manuals/sdltmanual/SDLTM00370.htm.
Unfortunately, if you look at www.hmrc.gov.uk/manuals/sdltmanual/SDLTM00365.htm you can see that HMRC will not accept your 'dual use' loophole. Even if you would find an acceptable use for part of the property that would enable it to be classified as non-residential, the value of the remaining part of the house that is residential would still be liable to stamp duty land tax at residential rates - see www.hmrc.gov.uk/manuals/sdltmanual/SDLTM00370.htm.
