Stamp Duty Land Tax: How a Recent Tribunal Appeal Helped Taxpayers Recover £12,500
If you’re facing a Stamp Duty Land Tax (SDLT) compliance check or dispute with HMRC, you’re not alone. These situations can be stressful and complex, but with specialist advice, you can protect your interests and even secure significant refunds.
Recently, our team at Relatus successfully represented clients in a Tribunal appeal (Wood v HMRC TC/2023/09065), helping them recover £12,500 from HMRC. Here’s how we achieved this outcome and why expert guidance is crucial for SDLT disputes.
Understanding The Property In Dispute
The property involved a main house and an attached annex, which HMRC initially argued did not qualify for Multiple Dwelling Relief (MDR).
Despite being physically connected, the annex had features indicating it could function as an independent dwelling:
- An independent external entrance;
- A kitchen;
- A bathroom;
- A studio area;
- Two internal lockable doors separating the annex from the garage and from the main house;
- An independent fuse box;
- Independent heating controls;
- A separate water stop tap.
These features were central to our case demonstrating the annex’s suitability for occupation.
HMRC’s Arguments Against Multiple Dwelling Relief
HMRC disputed the annex’s independence, highlighting factors they believed reduced privacy and self-sufficiency:
- The window in the main house kitchen that overlooked the annex hallway;
- The internal doors, one of which opened into the corridor where the annex bathroom was located were only lockable via a key lock;
- Access was via the driveway of the property or the garden;
- The garden was overlooked by the annex and the main house;
- The lack of independent hot water controls;
- The lack of separate council tax, postal address and title number.
Our Approach: Why the Annex Qualified as a Dwelling
On behalf of our clients we argued that:
- Fiander required a “degree” of privacy, security and self-sufficiency not absolutes;
- A dwelling only needs to satisfy an occupiers “basic” living needs;
- Minor adjustments post-completion to improve privacy and security are acceptable;
- Internal locks and shared garden access are common in rental properties;
- Council tax, postal addresses, and title numbers are administrative and do not affect dwelling suitability;
- Inability to sell an annex independent is not a relevant consideration;
- Suitability for occupation by a tenant is the correct test.
Tribunal Upheld our Appeal
The Tribunal upheld all of our arguments and dismissed HMRC’s claims. The annex was deemed suitable for use as a dwelling, and the appeal against HMRC’s closure notice was allowed.
Outcome
The taxpayers are now entitled to claim a £12,500 refund from HMRC, concluding a three-year compliance check and Tribunal process.
Why Specialist Advice Matters in SDLT Disputes
Engaging a specialist adviser early in a compliance check can:
- Reduce stress and provide assurance;
- Ensure practical, strategic advice is given;
- Maximise the likelihood of a successful outcome.
At Relatus, we have extensive experience handling both SDLT compliance checks and Tribunal appeals, always prioritising the best interests of our clients.
Need Help with an SDLT Compliance Check or Appeal?
If you’ve received a Stamp Duty Land Tax compliance check or are considering a Tribunal appeal, our experts can guide you through the process.
Contact Relatus today to discuss how we can support you and ensure you get the outcome you deserve.
