In Michael and Anthea Mullane v HMRC [2021] TC08100, the First Tier Tribunal (FTT) dismissed an appeal against HMRC closure notices denying Multiple Dwellings Relief (MDR) on the purchase of a property with an annexe. The cooking facilities were of insufficient quality to allow the annexe to be occupied as a separate dwelling.

  • The appellants acquired a property that comprised the main house and an annexe.
  • An SDLT return was filed in August 2018.
  • An amended return was filed in November 2018 claiming Multiple Dwellings Relief (MDR).
  • HMRC raised an enquiry and issued a Closure notice denying MDR.
  • The appellants sought a Statutory review which upheld the decision.
  • The appellants Appealed to the tribunal.

The FTT found that:

  • The former owner had joined the main house and annexe by constructing a conservatory-style corridor with doors to the main house, the annexe, the garden and the road.
  • The annexe had not been marketed by estate agents as an annexe but as two bedrooms and it was not registered separately for council tax or for utility bills.
  • A lack of lock on the door from the corridor to the annexe and a lack of curtains did not prevent the annexe from offering sufficient security or sufficient privacy to be considered a dwelling though.
  • The annexe also offered sufficient facilities to sleep and wash and eat.
  • There was no wiring for a cooker, the arrangements provided looked unsafe.

The FTT big concerns over this lack of proper cooking facilities. In considering the MDR legislation it decided that as this was to increase the supply of rental accommodation and it was for the appellant to demonstrate that the annexe could be let:

  • The appellants had no knowledge of the necessary steps required to obtain building regulation approval and safety certificates to be able to let the premises lawfully.
  • The occasional use of the annexe by friends was not demonstrative of suitability for use as a separate dwelling and the cooker, installed after completion, could not be used safely.

The appeal was dismissed.


The FTT was not convinced from the evidence presented that the annexe did exist as a separate dwelling, plus the lack of safe kitchen facilities indicated that it would be difficult to let out the property.

A point to note is that there is no mention of any letting test in the SDLT legislation although as a decision of the FTT this decision does not create a new precedent in that regard.

Useful guides on this topic

SDLT: MDR & Annexes Tool
Stamp Duty Land Tax (SDLT) Tool, if you are buying two or more properties in a single transaction use this tool to see if you meet the qualifying conditions and you may be able to claim both Multiple Dwellings Relief and relief from the Higher Rate Charge.

SDLT: Multiple Dwelling Relief 
What is Multiple Dwellings Relief (MDR) for Stamp Duty Land Tax purposes? When does it apply and how is it claimed?

Closure notices
When does HMRC issue a Closure Notice? Can a taxpayer demand one? Are there appeal rights? 

Statutory Review (by HMRC)
What is a Statutory Review? Is it automatic? What happens in a Statutory Review? Can you challenge a Statutory Review's findings? Can you influence a Statutory Review? 

How to appeal an HMRC decision
Disagree with a HMRC decision? How to appeal, what type of decision can you appeal, what are your different options when you disagree with HMRC? What are the key steps in making an appeal?

External links

Michael and Anthea Mullane v HMRC [2021] TC08100


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