In Goode Cuisine Company Limited v HMRC [2018] TC06416 the FTT considered whether relief from the SDLT higher rate charge could apply when a pub purchased a dwelling for use in its trade. It decided not, as the plan was to convert the building into a commercial property which would then exclude it from relief as it would cease to be a dwelling.

Schedule 4A FA 2003 provides for a higher rate of SDLT to apply to certain high value residential transactions.

Certain reliefs are available from the charge and paragraph 5B provides relief for purchases which satisfy the conditions of ‘Trades involving making a dwelling available to the public’. Residential property is property used as a dwelling, there are exclusions: S116(3) provides that a hotel or inn or similar establishment is not a dwelling.

  • The company purchased a house next their pub and planned to convert the house into 7 rooms for B & B letting with bathrooms.
  • They claimed SDLT relief.
  • HMRC objected: they argued that the conditions for relief were not met as once converted the property ceased to be a dwelling.

The taxpayer appealed they argued that the property should be treated as a dwelling as it was treated as one for council tax and s116(3) does not apply to the higher rate charge.

The FTT disagreed with the taxpayer’s analysis of the legislation and ruled that the property would cease to be a dwelling once converted as it was to become 'a hotel or similar establishment'  hence the relief was not available In case there was any doubt, it referred to the Hansard debates on the SDLT higher rate provisions when discussed at the committee stage be parliament.


A very interesting analysis of the SDLT charge in the context of the exemption for trade purchases. There may be some scope for appeal, we shall wait to see.


SDLT & Residential property


Goode Cuisine Company Limited v HMRC [2018] TC06416