When you acquire two or more dwellings as part of the same transaction or as linked transactions a claim for Stamp Duty Land Tax (SDLT) Multiple Dwellings Relief (MDR) may well be possible. Our latest survey of unsuccessful claims for MDR by property buyers reveals that buyers and their advisers are getting the rules wrong.
Our detailed review of SDLT appeal cases, heard by the First Tier Tribunal and Upper Tribunal in 2020 and 2021 show that in nearly all the decisions, an annexe or outhouse that is claimed to be a separate dwelling does not 'tick the right boxes' to show that it can provide independent access, security and privacy.
We have created an SDLT: Multiple Dwellings Relief Tool as a quick way to save yourself the cost of professional fees and fighting your case before a tax appeal.
Use our tool to check whether MDR is possible on the purchase of a larger property with an annexe, a granny flat, or some other kind of accommodation, such as a cottage within the grounds of the larger property.
Access the SDLT: Multiple Dwellings Relief & Annexes Tool |
What we found in our case review:
- In Keith Fiander and Samantha Brower v HMRC [2021] UKUT 0156, a lack of privacy or security: There was no door separating the house from the annexe.
- In Edward and Clare Partridge v HMRC [2021] TC7991: a lack of privacy or security. This was in part due to the bathroom being only accessible through the main house.
- In Andrew & Tiffany Doe v HMRC [2021] TC08003: a lack of privacy or security. A bedsit contained within a larger property was only accessible through the main house.
- In Michael and Anthea Mullane v HMRC [2021] TC08100: a lack of facilities. The cooking facilities were of insufficient quality to allow the annexe to be occupied as a separate dwelling.
- In John Mason v HMRC [2021] TC08216:a lack of facilities The lack of internal plumbing to install a kitchen sink as well as the annexe only being accessible while being in close proximity to the main house, proved the deciding factors.
Save yourself legal fees and use our tool.
Access the SDLT: Multiple Dwellings Relief & Annexes Tool |
Further useful tax guides on this topic
SDLT: At a glance SDLT rates and allowances
What is Stamp Duty Land Tax (SDLT)? What are the rates of Stamp Duty Land Tax (SDLT)?
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?
SDLT: Non-residents’ surcharge
Non-UK residents will be subject to an additional 2% Stamp Duty Land Tax (SDLT) surcharge on the acquisition of UK residential property from 1 April 2021.
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