“Reason for the refund This transaction’s original SDLT calculation was completed incorrectly because it qualifies for Multiple Dwelling Relief (MDR) which was not applied for originally.The property includes a main house and a “Granny Annexe”
“The purchase consisted of a main house with an attached annexe. 2 Dwellings. 1. Yes. 1 fuse box for each dwelling. See floor plan 1. There is 1 water stop located in the main house kitchen. See floor plan 1. There is 1 gas shut off valve, located outside and is accessible to both dwellings. See floor plan 1. There is one set of gas, electric and water meters. The gas and water meters are located outside and are accessible from either dwelling. The electricity meter located under the stairs of the main house. See floor plan 1. The property has one postal address. 2. Supporting evidence… 3. Floor Plan… 4. Interconnecting doors from both sides. 5. No changes have been made since completion. 6. No facilities have been added or removed since completion. … B1 – Boiler Main House B2 - Boiler Annexe GM Loc - Gas meter and gas shut off valve on outside wall Green outline is the annexe Electricity meter is under stairs of main house. WM - outside water meter at end of drive.”
“(1) In this Part “Residential property” means – (a) a building that is used or suitable for use as a dwelling, or is in the process of being constructed or adapted for such use, and (b) land that is all forms part of the garden or grounds of a building within paragraph (a) (including any building or structure on such land), or (c) an interest in or over land that subsist for the benefit of a building within paragraph (a) or of land within paragraph (b) and “non-residential property” means any property that is not residential property.” (a) a building that is used or suitable for use as a dwelling, or is in the process of being constructed or adapted for such use, and (b) land that is all forms part of the garden or grounds of a building within paragraph (a) (including any building or structure on such land), or (c) an interest in or over land that subsist for the benefit of a building within paragraph (a) or of land within paragraph (b) and “non-residential property” means any property that is not residential property.”
“Transactions to which this Schedule applies … (2) A transaction is within this sub-paragraph if its main subject-matter consists of— (a) an interest in at least two dwellings, or (b) an interest in at least two dwellings and other property.” (a) an interest in at least two dwellings, or (b) an interest in at least two dwellings and other property.”
“Other Supporting Information You have asked for the annexe at your property to be merged with the main house to form a single council tax banding. The Valuation Office Agency gives every house, flat or other domestic property a council tax band so that your local council is able to collect the correct amount of council tax. Normally each of these will receive a single band. However, when banding properties the Valuation Office is required by law to apply a separate Council Tax band to every: ‘building, or part of a building, which has been constructed or adapted for use as separate living accommodation’. The Annexe at 38 Parkland Avenue was brought into the council tax list on6 September 2015 following a full site inspection by a property inspector. The inspection confirmed that The Annexe was a fully self-contained unit with a kitchen, bedroom, bathroom and its own front door. You have confirmed in your email of13 December 2021 that no works have been carried out on the property. As the Annexe has been separately banded for over six years, I would have expected your solicitor and/or estate agent to have made you aware of this at the time of your purchase. The information is also freely available on our website. Based on the information available to me at this time a separate council tax band must still be applied to both 38 Parkland Avenue and The Annexe at 38 Parkland Avenue...”
“Facilities Sleeping Area – A dwelling would be expected to have an area available for sleeping. A room to sleep would normally have lighting, power points, and a window and be of a reasonable size. It will normally be separated from a ‘living area.’ Living Area – A dwelling would be expected to have a suitable area for day-to-day living, including space for chairs, tables, cupboards, furniture and to have visitors. The room would normally have lighting, power points, heating and a window. Bathroom – It would be essential for a dwelling to have its own washing and toilet facilities, which would usually include a bath or shower, a toilet and sink. Kitchen – A dwelling would be expected to have an area where a meal can be prepared and somewhere suitable to eat it (not necessarily in the same place). It is not necessary for a kitchen to have a cooker or white goods such as a fridge or dishwasher present at the effective date of the transaction, because these are sometimes removed on a house sale. However, there should be space and infrastructure in place e.g. plumbing for sink, power source for cooker etc. Accommodation such as studio flats, which may combine two or more areas into one room, would meet the requirements. Independent Entrances It is important that each dwelling has sufficiently independent access. This could be a separate entrance from the outside of the building, or from common parts of the building such as in the case of flats. Typically, there will be common parts (such as hallways and staircases) which each dwelling will have access to via a lockable door. HMRC would not normally consider the hallway or living accommodation of the main house as a common area. For example, an upstairs flat may appear sufficiently independent on its own. But if access to it is through the downstairs accommodation, then the lack of privacy/separation for the downstairs area is likely to mean that there is only a single dwelling. Privacy and interconnecting doors A single dwelling requires a degree of privacy from other dwellings. It is unusual, but possible, for adjoining dwellings to have interconnecting doors. It is relevant whether the door between the parts can be locked, or is readily capable of being made secure from both sides. The more interconnecting doors that there are between “units” the less likely they could be reasonably considered to be separate single dwellings. The type of door is also important to consider e.g. whether the door has adequate fire proofing and sound proofing to be considered suitable to separate the dwellings.”
“Dwelling” is not a term of art, but a familiar word in the English-language which in my judgement in this context connotes a place where one lives, regarding and treating it as home. Such a place does not cease to be a “dwelling” merely because one takes all or some of one’s meals out; or brings takeaway food in to the exclusion of home cooking; or at times prepare some food for consumption in heating devices falling short of a full cooking facility.”
“The starting point must be that “dwelling house” is not a term of art. It is an ordinary word in the English language. While I accept that dictionaries cannot solve issues of interpretation, it nevertheless is helpful to bear in mind that dwelling house has for centuries been a word of wide import. ... In ordinary parlance a bed-sitting room where somebody habitually stays is therefore capable of being described as a dwelling house. So much for generalities. The setting in which the word appears in the statue is important. It is used in legislation which is intended to afford a measure of protection to tenants under assured tenancies. This context makes it inappropriate for the court to place restrictive glosses on the word “dwelling”
“They [i.e. “dwell” and “dwelling”] suggest a greater degree of settled occupation than “reside” and “residence”, connoting the place where the occupier habitually sleeps and usually eats, ... In both ordinary and literary usage, residential accommodation is a “dwelling” if it is the occupier’s home (or one of his homes). It is the place where he lives and to which he returns and which forms the centre of his existence.”
“30. The modern approach to statutory interpretation was conveniently summarised by Lewison LJ in Pollen Estate Trustee Co Ltd v HMRC[2013] EWCA Civ 753 ;[2013] STC 1479 at [24]: “24. The modern approach to statutory construction is to have regard to the purpose of a particular provision and interpret its language, so far as possible, in a way which best gives effect to that purpose…” “24. The modern approach to statutory construction is to have regard to the purpose of a particular provision and interpret its language, so far as possible, in a way which best gives effect to that purpose…”
“90. Overall the lack of food preparation and washing up facilities weighs against the Bedroom being suitable for use as a single dwelling, although it is not determinative.”
“67…Putting locks on previously unlockable doors does not replace the locks. The equivalent for the locks would be if the vendor had removed the locks themselves and the purchaser had to replace them. 68. Second, placing locks on the doors changes the nature and function of the doors. The lockable doors provide a means of privacy and security not afforded by the doors without locks. There may be regulations such as fire regulations which need to be satisfied in order to fit locks.”
“51. We approach “suitability for use” as an objective determination to be made on the basis of the physical attributes of the property at the relevant time. Suitability for a given use is to be adjudged from the perspective of a reasonable person observing the physical attributes of the property at the time of the transaction. 52. A dwelling is the place where a person (or a group of persons) lives. A building or part can be suitable for use as a dwelling only if it accommodates all of a person’s basic domestic living needs: to sleep, to eat, to attend to one’s personal and hygiene needs; and to do so with a reasonable degree of privacy and security. By requiring that the building or part be suitable for use as a “single” dwelling, the statutory language emphasises suitability for self-sufficient and stand-alone use as a dwelling. Use as a “single” dwelling excludes, in our view, use as a dwelling joined to another dwelling.”
“47. The HMRC internal manuals on SDLT contain various statements relating to the meaning of “dwelling” and “suitable for use as a single dwelling”, but these merely record HMRC’s views and do not inform the proper construction of the statute. 48. We must therefore interpret the phrase giving the language used its normal meaning and taking into account its context. Adopting that approach, we make the following observations as to the meaning of “suitable for use as a single dwelling”: (1) The word “suitable” implies that the property must be appropriate or fit for use as a single dwelling. It is not enough if it is capable of being made appropriate or fit for such use by adaptations or alterations. That conclusion follows in our view from the natural meaning of the word “suitable”, but also finds contextual support in two respects. First, paragraph 7(2)(b) provides that a dwelling is also a single dwelling if “it is in the process of being constructed or adapted” for use as single dwelling. So, the draftsman has contemplated a situation where a property requires change, and has extended the definition (only) to a situation where the process of such construction or adaption has already begun. This strongly implies that a property is not suitable for use within paragraph 7(2)(a) if it merely has the capacity or potential with adaptations to achieve that status. Second, SDLT being a tax on chargeable transactions, the status of a property must be ascertained at the effective date of the transaction, defined in most cases (by section 119 FA 2003) as completion. So, the question of whether the property is suitable for use as a single dwelling falls to be determined by the physical attributes of the property as they exist at the effective date, not as they might or could be. A caveat to the preceding analysis is that a property may be in a state of disrepair and nevertheless be suitable for use as either a dwelling or a single dwelling if it requires some repair or renovation; that is a question of degree for assessment by the FTT. (2) The word “dwelling” describes a place suitable for residential accommodation which can provide the occupant with facilities for basic domestic living needs. Those basic needs include the need to sleep and to attend to personal and hygiene needs. The question of the extent to which they necessarily include the need to prepare food should be dealt with in an appeal where that issue is material. (3) The word “single” emphasises that the dwelling must comprise a separate self-contained living unit. (4) The test is objective. The motives or intentions of particular buyers or occupants of the property are not relevant. (5) Suitability for use as a single dwelling is to be assessed by reference to suitability for occupants generally. It is not sufficient if the property would satisfy the test only for a particular type of occupant such as a relative or squatter. (6) The test is not “one size fits all”: a development of flats in a city centre may raise different issues to an annex of a country property. What matters is that the occupant’s basic living needs must be capable of being satisfied with a degree of privacy, self-sufficiency and security consistent with the concept of a single dwelling. How that is achieved in terms of bricks and mortar may vary. (7) The question of whether or not a property satisfies the above criteria is a multi-factorial assessment, which should take into account all the facts and circumstances. Relevant facts and circumstances will obviously include the physical attributes of and access to the property, but there is no exhaustive list which can be reliably laid out of relevant factors. Ultimately, the assessment must be made by the FTT as the fact-finding tribunal, applying the principles set out above.” (1) The word “suitable” implies that the property must be appropriate or fit for use as a single dwelling. It is not enough if it is capable of being made appropriate or fit for such use by adaptations or alterations. That conclusion follows in our view from the natural meaning of the word “suitable”, but also finds contextual support in two respects. First, paragraph 7(2)(b) provides that a dwelling is also a single dwelling if “it is in the process of being constructed or adapted” for use as single dwelling. So, the draftsman has contemplated a situation where a property requires change, and has extended the definition (only) to a situation where the process of such construction or adaption has already begun. This strongly implies that a property is not suitable for use within paragraph 7(2)(a) if it merely has the capacity or potential with adaptations to achieve that status. Second, SDLT being a tax on chargeable transactions, the status of a property must be ascertained at the effective date of the transaction, defined in most cases (by section 119 FA 2003) as completion. So, the question of whether the property is suitable for use as a single dwelling falls to be determined by the physical attributes of the property as they exist at the effective date, not as they might or could be. A caveat to the preceding analysis is that a property may be in a state of disrepair and nevertheless be suitable for use as either a dwelling or a single dwelling if it requires some repair or renovation; that is a question of degree for assessment by the FTT. (2) The word “dwelling” describes a place suitable for residential accommodation which can provide the occupant with facilities for basic domestic living needs. Those basic needs include the need to sleep and to attend to personal and hygiene needs. The question of the extent to which they necessarily include the need to prepare food should be dealt with in an appeal where that issue is material. (3) The word “single” emphasises that the dwelling must comprise a separate self-contained living unit. (4) The test is objective. The motives or intentions of particular buyers or occupants of the property are not relevant. (5) Suitability for use as a single dwelling is to be assessed by reference to suitability for occupants generally. It is not sufficient if the property would satisfy the test only for a particular type of occupant such as a relative or squatter. (6) The test is not “one size fits all”: a development of flats in a city centre may raise different issues to an annex of a country property. What matters is that the occupant’s basic living needs must be capable of being satisfied with a degree of privacy, self-sufficiency and security consistent with the concept of a single dwelling. How that is achieved in terms of bricks and mortar may vary. (7) The question of whether or not a property satisfies the above criteria is a multi-factorial assessment, which should take into account all the facts and circumstances. Relevant facts and circumstances will obviously include the physical attributes of and access to the property, but there is no exhaustive list which can be reliably laid out of relevant factors. Ultimately, the assessment must be made by the FTT as the fact-finding tribunal, applying the principles set out above.”
“66. The FTT’s approach was to ask itself whether an objective observer would conclude that each part of the Property had been used as a single dwelling “in the relatively recent past”, and it is not clear that the additional evidence would have informed a conclusion as to whether any such use had in any event been “relatively recent.”
“21…access pursuant to the terms of a tenancy is something which is commonplace in the myriad of dwellings which are let on leases rather than occupied on a freehold basis. And indeed, freehold owners are subject to common rights-of-way in many urban and rural situations. So legal rights over property, whilst relevant, do not of themselves, weigh heavily against the privacy and security which the Fiander criteria requires us to consider.”
“Privacy and interconnecting doors … …It is relevant whether the door between the parts can be locked, or is readily capable of being made secure from both sides.”