Thomas Yeomans v The Commissioners for HMRC
[2024] UKFTT 955 (TC)
Alexander and Rebecca Clark v The Commissioners For HMRC
17 October 2024
[2024] UKFTT 923 (TC)
First-tier Tribunal
A couple bought a house with an attached apartment and tried to get a tax break for buying two homes. The judge said the apartment wasn't really separate because it shared things like utilities and the apartment's door to the main house was mostly glass and didn't offer enough privacy. So, they didn't get the tax break.
Key Facts
- •ARC (Alexander and Rebecca Clark) appealed an HMRC decision on Stamp Duty Land Tax (SDLT) concerning Multiple Dwellings Relief (MDR).
- •The property comprised a main house and an annexe (Disputed Area), purchased for £2,000,000.
- •ARC initially filed the SDLT return as a single dwelling, later amending to claim MDR based on two dwellings.
- •The key issue was whether the annexe was a separate dwelling for SDLT purposes at the effective date of transaction (EDT).
- •The annexe had a kitchen, bathroom, bedroom, and access to a shared swimming pool, but shared utilities and had an interconnecting door with the main house.
Legal Principles
A building or part of a building counts as a dwelling if it is used or suitable for use as a single dwelling.
Paragraph 7(2)(a), Schedule 6B, Finance Act 2003
'Suitable' implies appropriateness or fitness for use as a single dwelling at the EDT; mere capacity for adaptation is insufficient.
Fiander and Brower UT [48(1)]
The test for 'single dwelling' is objective, considering suitability for occupants generally, with privacy, self-sufficiency, and security.
Fiander and Brower UT [48]
The objective observer test helps determine how many dwellings a reasonable person would consider present at completion.
Fiander Ft-T [51]; Fiander UT
Essential features for a separate dwelling include security and privacy, which are impacted by factors such as interconnecting doors, shared utilities, and access.
HMRC guidance SDLTM00420, SDLTM00425, Fiander UT, Doe Ft-T, Fiander Ft-T, Partridge, Mobey, Ogborn
Post-EDT usage is irrelevant; the property's status at the EDT is determinative.
Ladson
Outcomes
Appeal dismissed.
The Tribunal found the annexe did not provide sufficient security and privacy at the EDT due to the mostly glass interconnecting door, shared utilities, and lack of separate access to the swimming pool. The Tribunal considered the property a single dwelling at the EDT, thus ineligible for MDR.