A agrees to buy three plots of land from B. A buys them in three different transactions on the same day, so the three transactions are linked.
The consideration given for each plot is:
Plot 1: £100,000
Plot 2: £200,000
Plot 3: £300,000
The total chargeable consideration in this example would be £600,000.
Using the rates and bands for non-residential property transactions the total tax chargeable would be:
(£150,000 x 0%)+(£100,000 x 1%)+(£350,000 x 5%) = £18,500
The next step is to calculate the tax payable for each individual plot. This is calculated as the total tax payable multiplied by the consideration for each individual plot divided by the total consideration for all of the linked transactions. The calculation for plot 1 would be:
£18,500 x £100,000 / £600,000 = £3,083
This calculation is repeated for each plot using the individual consideration for the relevant plot.
Plot 2 calculation:
£18,500 x £200,000 / £600,000 = £6,166
And plot 3:
£18,500 x £300,000 / £600,000 = £9,250
For further information about calculating tax on linked transactions please see our guidance.