In Nicole Behenna-Renton v HMRC [2025] TC09477, the First Tier Tribunal (FTT) found that Multiple Dwellings Relief was available on an annexe and main dwelling where each were individually capable of meeting the requirements for being a single dwelling.
On 19 August 2021, Nicole Rehenna-Benton bought a detached residential property in England.
- The property included a main dwelling and annexe separated by an internal door that was lockable, fireproof and soundproof.
- On 20 August 2021, the taxpayer submitted a Stamp Duty Land Tax (SDLT) return that did not include a Multiple Dwellings Relief (MDR) claim.
- On 20 July 2022, the taxpayer submitted an Amendment to the return, claiming MDR on the purchase, leading to a £26,250 reduction in SDLT.
- On 31 March 2023, HMRC notified the taxpayer that they were opening an enquiry into the amended SDLT return.
- On 11 July 2023, HMRC issued a pre-decision letter denying the MDR claim. The Closure notice rejecting the claim was sent on 21 September 2023. HMRC:
- Considered that the annexe was not sufficiently private or self-contained.
- Doubted the security of the internal door, which could allow free access from the main dwelling.
- Thought that the windows, glass doors and lack of curtains or blinds at the transaction's effective date compromised privacy.
- Took issue with the annexe not being separately registered for Council Tax purposes and the inability to turn off the water supply from the mains without affecting both the main dwelling and annexe.
- On 2 October 2023, the taxpayer appealed against the closure notice.
- HMRC upheld their closure notice in a 'view of the matter' letter on 26 October 2023, offering a review.
- After the taxpayer accepted the offer of a review, HMRC issued their 'review conclusion letter' on 2 February 2024, which, again, upheld the closure notice.
- On 1 March 2024, the taxpayer Appealed to the FTT.
The FTT found that:
- At the effective date of the transaction, the annexe and the main dwelling were each individually capable of providing basic living needs to an occupant.
- The FTT relied on the decision of the Upper Tribunal in Fiander and Brower v HMRC [2021] UKUT 0156 in deciding what constitutes a single dwelling.
- The annexe contained facilities for an occupier to sleep and meet personal hygiene needs. All the utilities could be controlled from the annexe. Since utilities can often be included as part of rent, a lack of separate bills or meters did not indicate a lack of self-sufficiency.
- The annexe and the main dwelling each afforded a sufficient degree of privacy, self-sufficiency and security, allowing them to meet the concept of being separate single dwellings.
- The FTT made a multi-factorial assessment of the facts and circumstances of the dwellings.
- The FTT noted that a landlord would typically retain a key for a property they rent, so the ability to access the annexe via the internal door would not sufficiently diminish security. More crucially, if the annexe were separately occupied, the door would be locked in a way that would not allow access from the annexe to the main dwelling.
- The existence of windows did not sufficiently compromise privacy, as this could be remedied with curtains or blinds.
- Despite the annexe not having a separate postal address, the post box was located at the end of the drive and this meant that an occupier of the annexe could privately collect their own post.
The appeal was allowed; the purchase qualified for MDR.
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? This relief ceased to apply from 1 June 2024.
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?
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)?
SDLT: Amending returns & refunds
How do I amend an SDLT return? When can I amend an SDLT return? How do I claim an SDLT refund? How do I deal with contingent consideration?
SDLT: Residential property higher rates
A guide to the Stamp Duty Land Tax (SDLT) higher rate charge on residential property, when it applies and what reliefs are available to exempt buyers from the charge.
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