In Marcus and Marcus Limited v HMRC [2022] TC08476, the First Tier Tribunal (FTT) determined that the main property in an estate purchase qualified for Multiple Dwellings Relief and that the apportionment of consideration based on floor area was just and reasonable.

  • Marcus and Marcus Limited (M&M) purchased a property that had an annex and outbuildings for £875,000 to provide supported living services for adults with learning difficulties.
  • The property had been occupied as a main home and some of the outbuildings as a children’s nursery.
  • M&M incorrectly claimed relief from the 15% SDLT rate for corporates.
  • HMRC discussed allowing a late claim for Multiple Dwellings Relief (MDR) as, in part, changes in legislation would have relieved M&M’s purchase from the 15% SDLT charge. M&M then made an MDR claim.
  • While both parties accepted that the consideration for such a claim is to be apportioned on a just and reasonable basis, they disagreed on the basis on which that basis should be applied.
  • HMRC contended that the main house included a number of additional outbuildings which took the proportion of consideration for the main house above £500,000, which would have excluded it from the MDR calculation.
  • The taxpayer contended that the outbuildings should not be aggregated with the main house which took the apportioned consideration to the main house below £500,000.
  • M&M appealed to the FTT.

The FTT found that the value of the main house was under £500,000 so could be included in the MDR calculation:

  • The result rested on whether the outbuildings were occupied or enjoyed with the dwelling as its garden and grounds.
  • The correct way to analyse it was to determine whether the buildings were occupied with the dwelling rather than just considering proximity.
  • The outbuilding used as an office was not part of the garden or grounds of the main house, it was attached to the buildings used in the nursery business. The summerhouse by contrast was part of the main house.
  • Market value is not necessarily the only way to determine a just and reasonable split, it depends on the facts and circumstances of the case.
  • The agreement between HMRC and M&M to apportion the consideration based on floor area was just and reasonable.

Useful guides on this topic

SDLT: Stamp Duty Land Tax, start here
What is SDLT? What are the SDLT rates? What is exempt from SDLT? What reliefs are available? When are returns due? When can you amend a return?

SDLT: Multiple Dwelling Relief (MDR)
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 residential property for Stamp Duty Land Tax (SDLT)? What tax rate applies?  What garden and grounds are subject to higher rates of SDLT?

External links

Marcus and Marcus Limited v HMRC [2022] TC08476


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