Example:

Gillian and Gilbert own their existing main residence and decide to sell this and purchase a next main residence which comprises a large house with a separate gatehouse.

At the end of the day that is the effective date of the transaction, even though Gillian and Gilbert have replaced their main residence, their purchase of an additional dwelling as part of this transaction means that they own two dwellings; therefore the ADS will apply.

As the transaction involves both the purchase of a replacement main residence and another dwelling, the relevant consideration upon which the ADS is charged is the chargeable consideration for the transaction under exclusion of that part that relates to the next main residence. In other words: that proportion of the chargeable consideration for the transaction that relates to the gatehouse. The determination of the relevant consideration that relates to the next main residence must be made on a just and reasonable apportionment basis.

The overall consideration paid for the transaction was £1.4 million. A just and reasonable apportionment of the consideration paid for the next main residence is determined to be £1.1 million.

As a result, the relevant consideration upon which the ADS will be charged is £300,000 (£1.4 million (overall consideration paid) minus £1.1 million (next main residence)). The ADS payable for the gatehouse is therefore £9,000.

Last updated: 
6 April 2016
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