In Keith Fiander and Samantha Brower V HMRC [2020] TC7676, the First Tier Tribunal (FTT) decided that an annexe was not a separate dwelling for Stamp Duty Land Tax (SDLT) Multiple Dwellings Relief (MDR). There was no door separating the house from its annexe.

  • The taxpayers purchased a property in April 2016. It included a detached house with an annexe, a garage and a summer house.
  • They claimed that the annex was a subsidiary Dwelling to the main house and claimed Multiple Dwellings Relief (MDR).
  • The annexe contained a sitting room, kitchen/utility room, bedroom and shower room. Marketing for the property included both parts as one joined dwelling and suggested it as a bedroom rather than separate annexe.
  • Access to the annexe could be made either from outside via its own French doors or by using a corridor which was connected via the main house. No door separated the main house from the annexe.
  • It also did not have its own separate postal address, council tax or utility supply.
  • HMRC had amended the return to remove the MDR claim, which increased the liability by £10,000.
  • HMRC considered that the lack of a door or other physical separation between the annexe and the main house as an important factor when the relief was withdrawn.

On appeal, the FTT had to establish whether the annexe and the main house each counted as a dwelling.

  • The suitability test is objective and based on the physical features of the property as at the effective date of completion.
  • The property was in disrepair at the time of purchase, however not to the extent that it would be unsuitable for use as a dwelling.
  • A building can be suitable for use as a dwelling only if it accommodates all of a person’s basic domestic living needs and to do so with a reasonable degree of privacy and security.
  • The degree of privacy and security can be obtained by physical separation and can be combined with a relationship of trust. A lockable door is not the only way to provide privacy and security.
  • How the main house and annexe could be used individually as dwellings would depend on the kind of relationship existing between the occupants of the two parts.
  • The corridor compromises the stand-alone quality of both parts as dwellings.

The FTT found:

  • The annexe did not form a separate dwelling to the main house.
  • MDR was not available.


SDLT: Annexes and multiple dwellings relief
What is multiple dwellings relief? When does it apply and how is it claimed?

Did you pay too much SDLT on your annexe?
The purchasers of properties with self-contained annexes before 1 April 2016 might have unknowingly overpaid Stamp Duty Land Tax (SDLT).

SDLT: Residential Property & Dwellings?
What is residential property for SDLT? What rate of SDLT applies to residential property? What is a dwelling? 

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Keith Fiander and Samantha Brower V HMRC [2020] TC7676)