# Multiple Dwellings Relief (no ADS payable)

Worked example for LBTT3015 Multiple Dwellings Relief.

Company A acquires 8 flats with 2 ground floor shop units for £1,250,000. The chargeable consideration attributable to the shops is apportioned on a just and reasonable basis to be £250,000.

As this transaction involves the acquisition of six or more dwellings, relief for purchases of six or more dwellings (see LBTT10040) will be available therefore Additional Dwelling Supplement (ADS) **will not** be included in any part of this calculation if the relief is claimed.

The amount of tax due in relation to the transaction is:

(DT x ND) + RT

where:

DT is the tax due in relation to a dwelling

ND is the number of dwellings

RT is the tax due in relation to remaining property

**Calculation of DT**

Tax due in relation to a dwelling:

**Step 1 – Find the total consideration attributable to dwellings**.

This is £1,000,000.

**Step 2 – Divide the total consideration attributable to dwellings by the number of dwellings.**

£1,000,000 / 8 = £125,000

**Step 3 – Calculate the amount of tax due in relation to a dwelling using the chargeable consideration from step 2, using tax rates and bands for residential transactions.**

Residential dwellings under £145,000 incur no tax.

So (DT x ND) in this case is zero.

**Calculation of RT**

**Step 1 – Calculate the amount of tax that would be due in respect of the transaction in the absence of the relief.**

The 8 flats and 2 shops are chargeable at non-residential rates.

The total tax chargeable for the transaction, based on a chargeable consideration of £1,250,000 calculated at non-residential rates, is therefore £46,500.

**Step 2 – Divide the consideration attributable to remaining property by the chargeable consideration for the transaction.**

i.e. 250,000 / 1,250,000 = a fraction of 1/5^{th}

**Step 3 – Multiply the amount calculated in step 1 by the fraction reached in step 2.**

i.e. £46,500 x 1/5th = £9,300 i.e. the tax due in relation to remaining property (RT).

**Applying the minimum prescribed amount of tax to the part of the transaction relating to dwellings**

Where DT x ND is less than the minimum prescribed amount, the amount of tax chargeable in relation to the relevant transaction is:

MPA + RT

where:

MPA is the minimum prescribed amount, and

RT is the tax due in relation to remaining property.

**Calculating the minimum prescribed amount**

The minimum prescribed amount (MPA) is 25% of:

TT – RT

where:

TT is the amount of tax that would be due in respect of the transaction but for the relief; and

RT is the tax due in relation to remaining property

As determined in Step 1 of ‘Calculation of RT’, the amount of tax that would be due in respect of the transaction but for the relief is £46,500. TT is therefore £46,500.

As determined in Step 3 of ‘Calculation of RT’, the amount of tax due in relation to remaining property, RT, is £9,300.

The minimum prescribed amount (MPA) is therefore 25% of £46,500 - £9,300 = £9,300

Because DT x ND (£0) is less than MPA, the amount of tax that is chargeable in relation to the transaction (after the application of multiple dwellings relief) is:

**MPA (£9,300) + RT (£9,300) = £18,600**

The minimum prescribed amount of 25% is provided for in The Land and Buildings Transaction Tax (Prescribed Proportions) (Scotland) Order 2014.