If there are 6 or more dwellings in a single transaction, that purchase can be treated as non-residential for LBTT purposes, and can benefit from the lower non-residential rates of LBTT. A full relief from the ADS is also available. There is no definition of "single transaction" in the LBTT legislation.

So what counts as a "single transaction" for these purposes? Although there is no definition in the legislation, and no detailed guidance, a number of points can be made:

  • a single transaction generally involves a single set of missives (contract) or overarching agreement
  • a single transaction is not confined to a single interest in land (e.g., a single title number) and can comprise multiple properties under multiple registrations
  • it appears that the purchases can complete at different times (but see below re: single vs linked transactions)
  • the transaction would normally involve the same seller and purchaser (or parties connected with them), though a transaction involving more than one seller can be treated as a single transaction, depending on the contractual arrangements
  • "single transaction" has a narrower meaning than just a "single deal" (i.e., a single deal could comprise a single transaction or a number of linked transactions).

A single transaction v linked transactions

It is important to distinguish between a single transaction and transactions which are linked. Transactions are linked if they form part of a single scheme, arrangement or series of transactions between the same seller and buyer or persons connected with them. In other words, linked transactions are a number of transactions with a connection between them, whereas a single transaction is only one transaction.

The main difference between a single transaction and a series of linked transactions is that the "6+" rule only applies to purchases as part of a single transaction. Six or more dwellings purchased in linked transactions are not treated as non-residential (unless there is a further linked transaction which is non-residential).

When is the LBTT payable ?

Practitioners should also be careful with multiple completion dates, as the way staged purchases are reported for single and linked transactions is likely to be different.

  • If a single transaction completes in stages, once a substantial amount of the overall price is paid or land transferred, the contract for the entire transaction is likely to have been substantially performed and the LBTT on the full price is reportable and payable.
  • If linked transactions complete in stages, each individual transaction is assessed for substantial performance on its own merits. One transaction completing or substantially performing should not result in LBTT on other properties being triggered.

    Multiple dwellings relief

    A claim for Multiple Dwellings Relief (MDR) can be made if two or more dwellings are purchased as part of a single transaction, or in linked transactions. An MDR claim means that LBTT is paid on the average price per dwelling, subject to a minimum of 25% of the LBTT payable without the relief. An MDR claim can be made even where six or more transactions are purchased as part of a single transaction, and the non-residential rate of LBTT is paid.


    Isobel d'Inverno

    Director of Corporate Tax