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We are experiencing many enquiries from individuals and businesses seeking to make claims and recover a repayment from HMRC in relation to multiple dwelling relief.
Multiple dwellings relief offers taxpayers a reduction in SDLT where it can be demonstrated that a purchase involved the acquisition of two or more self-contained dwellings. Whilst this may sound straightforward, a lack of defined conditions leaves the availability of the relief open to interpretation.
HMRC are clearly showing an interest in claims for multiple dwellings relief with this decision being released shortly after HMRCs success in the recent case of Fiander as digested by my colleague here.
The taxpayer sought to make a claim for multiple dwellings relief on the basis that the annex consists of the key requirements for it to be suitable for use as a dwelling including:
Whilst these factors are prima facie indicators that a property is suitable for use as a dwelling, other subsidiary factors did not support the position. It was determined by HMRC in the course of an enquiry that:
The judge (referring to Fiander) applied the test of a reasonable person taking an objective view in considering whether the annex was suitable for use as a self-contained dwelling in the round.
In summary, the case was ruled in favour of HMRC on the basis that:
HMRC, MDR & Fiander – Conclusion
This case and Fiander illustrate that it is not enough to establish that a property, part of a property or a building can be used as a dwelling but that it is suitable for use as a dwelling taking into account the wider range of factors which might be expected by persons occupying a dwelling.
HMRC have an increasing appetite for challenging claims for multiple dwellings relief which will further define the criteria for whether a property is ‘suitable’ for use as a dwelling. As such, it would be prudent for taxpayers to seek advice from a specialist to determine the validity and grounds of a claim for multiple dwellings relief.
We have assisted several clients with successful claims for multiple dwellings relief. If you think you may be entitled to relief, please get in touch for an initial no-obligation assessment.
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