Judgment summary
This case concerns an appeal by Liam Henry against HMRC's closure notices which denied multiple dwellings relief (MDR) claimed on the purchase of a property at The Drive, Rickmansworth (1).
The Appellant and his partner purchased the property for £1,175,000 on 10 July 2020 and claimed MDR, paying SDLT of £44,000 (6, 7). HMRC opened an enquiry and later issued closure notices concluding the property was a single dwelling at completion, meaning MDR was not available (8, 9, 10).
The Tribunal considered conflicting floorplans, a Marketing Floorplan used by estate agents and an Appellant Floorplan prepared by the Appellant, along with photographic and witness evidence, to determine the configuration of the property at completion (31, 32).
Applying the multi-factorial test from Fiander and Brower v HMRC [2021] UKUT 0156, the Tribunal found that the Appellant had not established, on the balance of probabilities, that the property matched the Appellant Floorplan at the effective date, and preferred the Marketing Floorplan as more reliable evidence (91, 94).
The Tribunal concluded that the property comprised a single dwelling at the effective date and dismissed the appeal (98, 99, 100).
Background
On 10 July 2020, Liam Henry and his partner Trisha Henry acquired the freehold of the Property for £1,175,000, this being the effective date of the transaction for FA 2003 purposes (6).
On 11 July 2020, the Purchasers filed a land transaction return claiming MDR using relief code 33 and paid SDLT of £44,000 (7).
HMRC opened an enquiry on 17 March 2021 and issued closure notices on 20 July 2022 concluding the Property was a single dwelling, so MDR was unavailable (8, 9, 10). The Purchasers appealed on 17 October 2022, HMRC issued its View of the Matter on 25 January 2023 maintaining its position, and a statutory review upheld the closure notices on 5 April 2023 (11, 12, 13, 14).
The Appellant notified his appeal to the Tribunal on 22 May 2024, and permission for late notification was granted by Judge Greenbank on 20 January 2025 (15, 16).
Core dispute
The issue for the Tribunal was whether the Property was one or two dwellings for SDLT purposes at the time of completion, within the meaning of paragraph 7(2)(a) of Schedule 6B FA 2003 (28).
The Appellant relied on the Appellant Floorplan, photographic evidence, and witness statements from JPB Architects and the demolition contractor Zone Recovery Global Limited, to argue that the Property comprised two separate dwellings at completion, including a subsidiary dwelling with its own kitchen, bathroom, and lockable interconnecting doors (36, 37, 44).
HMRC relied on the Marketing Floorplan, subsequent planning application documents describing a 'one for one replacement dwelling', and the absence of evidence of separate utilities, to argue the Property was a single dwelling at completion (50, 52, 72).
Court findings
The Tribunal found that the evidence provided by Mr Roderick of JPB neither confirmed nor denied that the Property reflected the Marketing Floorplan, as he had never visited the Property, and attributed limited weight to this evidence (87).
The Tribunal gave limited weight to the evidence of Mr Corridan, as he did not attend for cross-examination, his evidence was provided several years after demolition, and no contemporaneous records or instructions were produced (88).
The Tribunal found the photographic evidence relied upon by the Appellant to be limited and in places inconclusive, including that one photograph of an alleged subsidiary kitchen appeared to be the same as that used in the estate agents' marketing materials for the main kitchen (90).
The Tribunal preferred the Marketing Floorplan as more reliable evidence of the Property's layout at the effective date and found that the Appellant had not established, on the balance of probabilities, that the Property existed in the configuration depicted by the Appellant Floorplan (91, 94).
The Tribunal further found that, even if it had accepted the Appellant Floorplan, the alleged subsidiary accommodation, accessed via a garage-style entrance and interconnecting doors, would not have amounted to a genuinely self-contained dwelling capable of supporting a separate and independent life (96).
Applying the multi-factorial test in Fiander and Brower v HMRC [2021] UKUT 0156, the Tribunal found there was only one single dwelling at the Property at the effective date of the transaction (98).
Outcome
The Tribunal found that the purchase of the Property did not fall within Schedule 6B FA 2003 because its main subject-matter consisted of an interest in only one dwelling (99).
The Appellant's appeal was dismissed (100).
Major issues / areas of contention
- Whether the Property comprised one or two dwellings for SDLT purposes at the effective date of the transaction, within paragraph 7(2)(a) of Schedule 6B FA 2003 (28).
- Whether the Appellant Floorplan or the Marketing Floorplan accurately reflected the Property's layout at completion, given the Property had since been demolished (84, 91).
- The weight to be given to witness evidence from JPB Architects and the demolition contractor, neither of whom attended for cross-examination (87, 88).
- The sufficiency of photographic evidence to establish the location, configuration, and separation of the alleged subsidiary dwelling (90).
- Whether the alleged subsidiary accommodation offered sufficient privacy and security, given access via a garage-style door and shared rear garden access, to constitute a separate dwelling (55 to 66).
- The relevance of the absence of separate utilities and services to the multi-factorial assessment of suitability for use as separate dwellings (69 to 74).