Having first announced that people buying a home with an annexe (a separate dwelling) could have to pay the new 3% higher Stamp Duty Land Tax on the whole purchase the Government has decided that this was not what was meant and a ‘clarification’ has been issued. This is the text from HMRC sent to a conveyancing lawyer which is the clearest that I have seen.
“An annexe will only be treated as a separate dwelling for the purposes of the higher rates if it is capable of being sold separately. However, the Government has recently announced that will be made to the Finance Bill to exempt all annexes from the higher rates of SDLT when purchased in the same transaction as a main residence (either a first property or a replacement of a main residence). In this case, the transaction will be treated as only involving one dwelling and therefore, SDLT at the standard rates will apply to the entire transaction. To qualify as a single dwelling the annexe must be within the grounds of the main home and worth no more than a third of the total transaction value.”