In Ladson Preston Limited v HMRC [2022] UKUT 00301, the Upper Tribunal (UT) confirmed that Multiple Dwellings Relief (MDR) cannot apply to the acquisition of bare land: the fact that there was planning permission and that boreholes had been dug for testing did not alter that fact.

  • The taxpayers acquired land subject to planning permission allowing a number of residential properties to be constructed.
  • Their Stamp Duty Land Tax (SDLT) return claimed Multiple Dwelling Relief (MDR) on the acquisition on the basis that dwellings were ‘in the process of being constructed’ on the land at the Effective Date of the Transaction (EDT).
  • HMRC denied the relief.
  • The taxpayer’s Appeal to the First Tier Tribunal was unsuccessful and they appealed to the UT.

The UT found that:

  • MDR is available on the acquisition of more than one residential dwelling, or residential dwellings which are in the process of construction.
  • MDR was not available to the taxpayers as:
    • A building can only be said to be in the process of being constructed for use as a dwelling if there is some physical manifestation of that building.
    • The intention to create a building, planning permission in this case, is not enough.
    • Boreholes dug prior to the EDT to investigate the area where the foundations for the permitted buildings were to be built did not form part of the construction of the proposed buildings. This activity did not represent the construction of a residential dwelling.
    • Works undertaken on the ETD by the purchaser did not impact the analysis of the MDR provisions. MDR  was concerned with the state of the asset when it was acquired not at the end of the EDT.

The appeal was dismissed.

Useful guides on this topic

SDLT: Multiple Dwellings 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
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.

FTT finds planning permission not enough to secure MDR
In Ladson Preston Limited, AKA Developments Greenview Limited v HMRC [2021] TC08197, the First Tier Tribunal (FTT) held that planning permission was not capable of satisfying the requirement of being "in the process of construction" in order for Multiple Dwellings Relief (MDR) to apply.

External links

Ladson Preston Limited v HMRC [2022] UKUT 00301


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