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An individual purchases the freeholds of four houses in one transaction and the freeholds of two shops in a separate linked transaction. The total linked transaction value is £1,500,000.

The transaction involving the houses is a relevant transaction for the purposes of the relief. Two of the houses cost £250,000 and two cost £350,000 so the dwellings on which MDR can be claimed have a value of £1,200,000 and the SDLT should be based on this figure. This is calculated based on £1,200,000 divided by 4. The tax is calculated on this figure and then multiplied by 4. The higher rate for additional dwellings will be applicable as the transaction consists of major interests in dwellings. More information about the higher rate can be found at SDLTM09730. The non-resident rates of SDLT may also be applicable if the individual is not UK resident. More information about the non-resident rates can be found at SDLTM09860.

The transaction involving the shops is not a relevant transaction for the purposes of the relief. The shops cost £150,000 each so the non-residential element totals £300,000, however we calculate the tax on this sum based on the total linked transaction value of £1,500,000. The total tax on £1,500,000 should be apportioned to the non-residential consideration of £300,000, i.e. calculate the tax due on the £1,500,000 then multiply by 20% to arrive at the tax due.