Thomas Yeomans v The Commissioners for HMRC
[2024] UKFTT 955 (TC)
James Winfield v The Commissioners for HMRC
7 August 2024
[2024] UKFTT 734 (TC)
First-tier Tribunal
Someone bought a property with two separate living areas, each with its own kitchen and bathroom, but sharing a boiler and electricity. The tax office said it was one house, but the court said each area was a separate home, meaning less tax was owed.
Key Facts
- •Appeal concerning Stamp Duty Land Tax (SDLT) and Multiple Dwellings Relief (MDR).
- •Property: Gilboa Barn, acquired for £1.8 million on 16 December 2021.
- •Appellant claims MDR, asserting the property comprises two dwellings.
- •HMRC contends it's a single dwelling, resulting in a £59,750 SDLT discrepancy.
- •Property comprises two areas of accommodation: Dwelling 1 (currently unoccupied) and Dwelling 2 (occupied by appellant's family).
- •Both dwellings have separate entrances, kitchens, bathrooms, and living areas.
- •Shared utilities: single oil-fired boiler and electricity supply (though split into two fuse boxes).
- •Single council tax account and postal address.
- •Property marketed as a single dwelling but previously used as both family and separate rental accommodations.
- •Planning permission in 2007 for garage conversion (dwelling 1 created), with a condition limiting use to domestic needs.
Legal Principles
A transaction qualifies for MDR if its main subject matter consists of at least two dwellings or at least two dwellings and other property.
Finance Act 2003 (FA 2003), Schedule 6B, sub-para 2(2)
A building or part of a building counts as a dwelling if it is used or suitable for use as a single dwelling, or is in the process of being constructed or adapted for such use.
FA 2003, Schedule 6B, para 7(2)
Interpretation of "suitable for use as a single dwelling" requires considering the property's physical attributes at the transaction date. Suitability is judged objectively, considering occupants generally; adaptations or alterations are insufficient.
Fiander and Brower v HMRC [2021] UKUT 0156
A 'dwelling' is a place suitable for residential accommodation providing basic living needs (sleep, personal hygiene); the need to prepare food is context-dependent.
Fiander and Brower v HMRC [2021] UKUT 0156
The multifactorial assessment of whether a property is a single dwelling should consider all facts and circumstances, including physical attributes, access, and degree of privacy, self-sufficiency, and security.
Fiander and Brower v HMRC [2021] UKUT 0156
Outcomes
Appeal allowed. MDR applies.
The Tribunal found that both dwellings were suitable for use as single dwellings, despite shared utilities and a single postal address. The physical attributes and facilities of each dwelling, including substantial separating internal doors, outweighed other factors. The degree of privacy, self-sufficiency, and security was sufficient, even considering the shared utilities which could be managed via a tenancy agreement.