Before we get into an in depth discussion about Multiple Dwelling Relief, let us at first what it is. By lay man’s terms, it is an exemption provided by the HMRC to an individual, on the tax that is payable on the monetary transaction for the purchase of more than one dwellings.
In fact, a quick look at the Multiple Dwelling Relief (MDR) will reveal its efficacy in reducing the Stamp Duty Land Tax (SDLT) and its equivalent in the Wales and Scotland and it applies if and when an individual purchases two or more dwellings or conduct any transaction or a series of transactions related to those handover of the ownership of those dwellings.
What is meant by ‘dwellings’?
By definition, ‘dwellings’ can be defined as properties or houses that have a separate first floor, having bedrooms, bathroom, kitchen, its own boiler, doorbell, separate entrance, electric connections. Seemingly, it should be separated from the principle portion of the property, but with a shared, common front door, stairs and hallway.
Now discussing about the Financial Transaction Tax (FTT) the appeal involves two elements – Whether the HMRC has raised the equity within the time frame allowed, and the entitlement to the MDR. Thus you see, these are the elements that can best be handled by the seasoned accountants in Reading or elsewhere. Therefore, it is the responsibility of these professionals to disclose all the technicalities of MDR and guide their clients to avail the exemption.
Indeed, these accountants have to play a pivotal role identifying the tax savings, which can benefit both the parties, including their clients. If the purchaser of the multiple dwellings can reap benefit out of the reduced SDLT liability, it will be possible for them to get additional funds for even a higher and more lucrative offer.
This will mean a more delighted seller and increased commission. Thus you see, the competency of these professional accountants not only helps their clients but will leave these accountants beneficial as well.
Do the MDs (multiple dwellings) have the necessary facilities, so that they can be considered, ‘MDs’?
Does the dwelling contain spaces that can be used as bedroom, and washing facilities? Does it include a kitchenette or a bathroom? Though typically these are not accounting queries, but still it is, strictly speaking, the duty of these tax advisors in Reading to help their clients identify the characteristics, so that they do no find themselves at the wrong end of the barrel while seeking the tax relief or exemption.
Also, it their duty to help their clients and advise them, whether the dwellings are technically separate and independent from the main building, so much so that it can be clubbed under the MD category.
There have been instances when granny annexes and converted garages, converted party barns and garden offices have failed to get into the category of the MD and their owners failing to get the exemptions, due to the misguidance of their accountants.
Thus, the chartered certified accountants in Reading or anywhere else have to be absolutely sure before guiding their clients to go for the purchase and then make arrangements for the relief. Remember, one of the most common issues that have been seen is that the property with an additional dwelling could not be accessed independently just due to the incompetency of the accountants, who misguided their clients and told them to refrain from applying for the tax relief.
Sellers of these properties can increase the value of their properties pretty significantly by making certain minor adjustments and enhancements. This is to increase the likelihood of getting the relief. If such adjustments and alterations, enhancements have been made, that should reflect properly in the sales particulars as these particulars will be viewed as 3rd part documentation of the property subject to purchase. Again, the tax advisors have a key role to play in this regards.
Therefore you see, if you are going planning to purchase MDs, you need to get in touch with quality accountants who will help you in getting maximum relief.
We at Biz Accounting Solutions Ltd ought to be the home to the best accountants, who can guide you through the purchase and the tax relief. Call us at (0)7877 224964 / (0)1183671854 or email us at firstname.lastname@example.org during our hours for further details.