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SDLTM29903 - Abolition of multiple dwellings relief for SDLT (1 June 2024): Linked Transactions

The abolition of MDR applies to land transactions with an effective date falling on or after 1 June 2024. See SDLTM07600 for the definition of ‘effective date’.

There are transitional rules which deal with linked transactions (see SDLTM30100), some of which remain eligible for MDR (‘pre-abolition transactions’) and some of which are no longer eligible for MDR as a result of the abolition of the relief (‘post-abolition transactions’).

Pre-abolition land transactions are those –

·       which complete, or substantially perform before 1 June 2024, or

·       where contracts were exchanged on or before 6 March 2024, provided it is not an excluded transaction (see SDLTM29902). 

Post-abolition transactions are those which would have been relevant transactions for the purposes of MDR but no longer are because they complete or substantially perform on or after 1 June 2024.

Where pre-abolition land transactions are linked to post- abolition land transactions and all of those transactions would, but for the abolition of MDR, be relevant transactions for the purposes of MDR (i.e. transactions within Schedule 6B Finance Act 2003) –

·       a claim for MDR is available only in relation to the pre-abolition land transactions, and

·       if such a claim is made in relation to any of those pre-abolition transactions, whilst the post-abolition transactions remain linked to one-another, they are treated as no longer being linked to any of the pre-abolition transactions.

In the circumstances described above, these rules effectively reset the position at the point the first post- abolition transaction takes place, allowing the purchaser to benefit from a full nil-rate tax band (applying the relevant rates of SDLT in section 55 FA03 and taking into account any potential surcharges) on that first post- abolition transaction. 

SDLTM29904 sets out a series of examples of how the transitional rules work in relation to linked transactions which occur before and after the abolition of MDR.