Example:

Dave currently owns a main residence worth less than £40,000 which he does not intend to sell. He decides to purchase another dwelling as a buy-to-let property. At the end of the day that is the effective date of the transaction, Dave is deemed to own one dwelling (the new purchase) as his ownership of his existing dwelling worth less than £40,000 is not taken into account. Therefore, the ADS will not apply.

However, if Dave purchased this additional dwelling acting as a sole trader or in a partnership of which that he is a partner, in the course of a business the sole or main activity of which is investing or dealing in property, the ADS would apply.

Last updated: 
5 April 2016
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