In Keith Fiander and Samantha Brower v HMRC [2021] UKUT 0156, the Upper Tribunal (UT) confirmed that Multiple Dwelling Relief was not available for the purchase of a detached house with an annexe. 

  • The taxpayers purchased a detached house with an annexe, a garage and a summer house in April 2016.
  • They claimed that the annexe was a separate Dwelling to the main house and claimed Multiple Dwellings Relief (MDR).
  • The annexe contained a sitting room, kitchen/utility room, bedroom and shower room. 
  • Access to the annexe could be made either from outside via its own French doors or by using a corridor which was connected to the main house.
  • No door separated the main house from the annexe through the corridor.
  • The annexe did not have its own separate postal address, council tax or utility supply.
  • HMRC amended the SDLT return to remove the MDR claim, as the lack of physical separation between the main house and annexe meant that it lacked the security to be a separate dwelling.
  • The taxpayer Appealed.

The FTT dismissed the appeal finding that:

  • The property had the facilities to be occupied as a separate dwelling, that is that the occupant could sleep, eat and wash.
  • The property did not have the required privacy and security to be considered a separate dwelling.

The Appellants appealed to the UT on the grounds that it has failed to take into account oral evidence given by Ms Bower and that it had erred in law in reaching the conclusions that it did.

The UT dismissed the appeal finding that:

  • While an appeal to the UT can only be made on a point of law, a finding of fact can lead to an error of law. For example where a finding is made without evidence, or upon a view of the facts that cannot be reasonably entertained.
  • The UT considered that the correct procedure to disagree with a finding of fact presented by the FTT was as follows:
    • If both parties agreed that the evidence was omitted then it could be added to the findings of fact made, if not;
    • The judge’s notes should be obtained and criticisms put to the judge for comment.
    • If the judge states that their note is correct, the findings of fact cannot be displaced.
  • As the FTT judge did not recall the oral evidence having been made and it had not been included in their notes of the hearing, the FTT’s findings of fact could not be displaced and the evidence was considered inadmissible.
  • Even if the evidence had been admissible, it concerned the prior use of the buildings rather than its use at the relevant time, which was at completion.
  • The FTT had applied the correct principles in addressing whether the annexe represented a separate dwelling.
  • There was no error in law in the application of those principles to the facts of the case.

Useful guides on this topic

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

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: Residential property & dwellings
What is a residential property for Stamp Duty Land Tax (SDLT)? What tax rate applies?  What garden and grounds are subject to higher rates of SDLT?

SDLT: At a glance, Stamp Duty Land Tax, rates & allowances
What is Stamp Duty Land Tax (SDLT)? What are the rates of Stamp Duty Land Tax (SDLT)?

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

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

External links

Keith Fiander and Samantha Brower v HMRC [2021] UKUT 0156


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