Matthew Lambourne & Anor v The Commissioners for HMRC [2026] UKFTT 997 (TC)

[2026] UKFTT 00997 (TC)

Case No TC 09942

FIRST-TIER TRIBUNAL

TAX CHAMBER

Hearing Heard on: 7 May 2026

Date Judgment date: 02 July 2026

Hybrid hearing – Taylor House with Appellant attending remotely

Appeal reference: TC/2024/06236

Closure Notices – Jurisdiction – Multiple Dwellings Relief – Stamp Duty Land Tax – whether part of “land” or “chattel”

Before

TRIBUNAL JUDGE ROSA PETTIFER

TRIBUNAL JUDGE HUGO HOLMES

TRIBUNAL MEMBER DR COLIN BOYD

Between

MR MATTHEW LAMBOURNEAppellant

MRS SARAH LAMBOURNEAppellant

THE COMMISSIONERS FOR HIS MAJESTY’S REVENUE AND CUSTOMSRespondent

Mr Matthew Lambourne, representing himself and Mrs Sarah Lambourne for Appellants

Ms Gemma Truelove, litigator of HM Revenue and Customs’ Solicitor’s Office for Respondents

DECISION

Introduction

[1]This case concerns the availability of Multiple Dwellings Relief (“MDR”) from Stamp Duty Land Tax (“SDLT”). The effect of MDR is to lower the effective rate of SDLT by splitting the chargeable consideration among the number of dwellings which are the subject matter of a land transaction.

[2]The Appellants purchased a house and surrounding land in East Sussex (the “Property”) on 12 April 2023 for £1,010,000, plus £850 in respect of the Property’s contents. They submitted an SDLT return on the same day (the “Return”) on the basis that £42,250 in SDLT was payable. On 5 July 2023 they applied to amend the Return applying MDR. On 26 July 2023 HMRC requested copies of the contract for the transaction and the TR1 form. These were provided on 2 August 2023. The Appellants received a refund of SDLT of £16,750.

[3]HMRC opened an enquiry into the Return and issued a closure notice on 27 May 2024. This concluded that MDR was not available and so the Appellants would need to repay the £16,750 plus interest.

[4]This case concerns a unit (the “Unit”) on the site of the Property and whether it meets the conditions for MDR to apply to the transaction. The parties have referred to this variously as an “annex”, “caravan” and “mobile home”.

[5]The Property consists of a detached five-bedroom country house, various open spaces, and a detached double garage. The status of the Unit, and whether it forms part of the Property’s land, is a key point of contention in this appeal.

[6]We are grateful for the clear submissions, both written and oral, provided by Mr Lambourne and Ms Truelove. However, we have not found it necessary to refer to every argument advanced or all the authorities cited in reaching our conclusions.

[7]For the reasons given later in this decision, it is our view that MDR is not available because the Unit does not constitute land. However, we accept that the purchase price for the Property included payment for the Unit. Consequently, the SDLT due will need adjustment to remove the value of the Unit from the chargeable consideration.

[8]We understand that the enquiry and subsequent appeal process have been a challenging and, at times, distressing experience for Mr Lambourne. This case concerned different interpretations of the facts and law between the Appellants and HMRC. Our finding for HMRC purely reflects our decision on those issues. There was no suggestion by HMRC nor does this decision reflect that the Appellants acted improperly in any way. They made a claim in the genuine belief that MDR would apply.

issues and burden of proof

[9]The fundamental issue between the parties is whether the Appellants are entitled to MDR in relation to the Unit. This raises two questions:(1) Whether the Unit is a “chattel” or counts as part of the land and so a “chargeable interest” for MDR purposes under Schedule 6B paragraphs 2(5) and s.48(1) Finance Act 2003; and

(2) Whether the Unit is suitable for use as a single dwelling under Schedule 6B, paragraph 7(2) Finance Act 2003.

[10]The burden of proof on point (1) varies depending on whether the Unit is resting on its own weight or it is attached to the land in another way. If it rests on its own weight, the burden is on the Appellants to show that it is part of the land. If it is attached in another way, the burden is on HMRC to show it is a chattel. The burden of proof is on the Appellants in relation to point (2). The standard of proof for both points is on the balance of probabilities.

[11]There is also a procedural question around HMRC’s ability to introduce the issue of whether the Unit constitutes a “chargeable interest” argument during the litigation. We refer to this as the chattel vs. land argument.

outline of the parties’ positions

[12]The Appellants’ position can be summarised as follows.(1) HMRC should not be allowed to introduce the “chattel” vs. land argument in the litigation as it was not part of their enquiry into the Return.

(2) If they can raise this argument, then the Unit is part of the land, not a chattel. Removing it would damage the Unit. It would also require damage to the land, particularly felling the trees that have grown around the Unit. There is planning permission to have the Unit on the Property for residential purposes.

(3) The only challenge HMRC has made on suitability for use as a single dwelling relates to privacy. There is sufficient privacy for anyone living in the Unit and the main house, even if the inhabitants did not know each other.

[13]HMRC’s position can be summarised as follows.(1) It is open to HMRC to use new arguments during a litigation as long as they relate to the same conclusion in the enquiry into the Return. The conclusion of the enquiry into the Return was that MDR is not available.

(2) MDR is only available for “chargeable interests”. That includes structures that are part of the land. The Unit is a chattel, not part of the land. Therefore MDR is not available.

(3) It is possible to remove the Unit with the appropriate equipment without damaging it or the land significantly. The planning permission is for a caravan, not a permanent structure. Therefore the Unit is a “chattel”.

(4) If the Unit is part of the land, it does not have sufficient privacy to be suitable for use as a single dwelling. the facts Introductory points

the facts

[14]The Tribunal heard oral evidence from Mr Lambourne who was cross-examined. Mr Lambourne answered questions in a straightforward manner. We found Mr Lambourne to be honest and credible. Although we have reached different conclusions from those advanced by Mr Lambourne in certain respects, we accept that he genuinely held the views he expressed in his evidence.

[15]We set out some findings of fact in the 'Findings of fact’ part of our decision. Although where it is clearer to do so we make some in other sections of our decision. A significant proportion of our findings of fact are from the documents supplied or the parts of Mr Lambourne’s evidence that was unchallenged. Consequently, many of them require no discussion as they were not in dispute. Where they were in dispute or require further discussion, we provide the reasons for our findings below. Therefore, generally we incorporate the relevant evidence in our findings rather than setting it out separately.

[16]In addition to Mr Lambourne’s evidence we considered particularly the following documentary evidence:(1) The Appellants’ photos of the Unit, the house and the surrounding grounds;

(2) Photos from the Zoopla listing when the Appellants purchased the Property;

(3) A grant of planning permission dated 19 July 2002 and the associated application; and

(4) A hand-drawn plan of the Property (drawn by previous owners) showing supplies to the Unit, labelled “TEMP SUPPLIES TO MOBILE. ELECTRICITY + WATER”.

Findings of fact

[17]The Unit is a flat-roofed metal structure with glass windows and doors, most of which are transparent. It does not have a towbar or wheels. It appears to be a static mobile home or caravan that would need to sit on a wheeled platform to be towed. The Unit is clearly self-contained.

[18]Mr Lambourne’s photos also showed the interior of the Unit. They show: a bedroom with a double bed; a living/dining room which contains a hob, an oven, a sink, a microwave, what appears to be a washing machine, a place for sitting and sufficient further room for a drum kit; and a bathroom with a toilet, a sink, a shower and a frosted window.

[19]The Unit is “properly plumbed in” rather than having a hose that one could unplug. The electricity and drainage are similarly connected. The points of connection are not visible on the photos provided.

[20]The Unit rests on concrete pillars. Its only other connections to the land are the utilities pipes and cables. The photos mentioned at paragraph ‎16(1) above showed a fence with a gate on the driveway leading to the Unit on one side and the house on the other. The Appellants added this fence during their ownership.

Legislation – sdlt and mdr

[21]The legislative framework for SDLT is largely contained in the Finance Act 2003 ("FA 2003"). Unless otherwise stated, references to sections and schedules are to FA 2003. The following are directly relevant to this appeal.

[22]Section 42(1) provides that SDLT is chargeable on “land transactions”.

[23]Section 43(1) defines land transactions as “any acquisition of a chargeable interest”.

[24]Section 48(1) defines “chargeable interest” by reference to “an estate, interest, right or power in or over land”.

[25]Schedule 6B contains the provisions for MDR, and paragraph 2 states in relevant part as follows:(1) This Schedule applies to a chargeable transaction…

(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… (5) A reference in this Schedule to an interest in a dwelling is to any chargeable interest in or over a dwelling.

[26]Paragraph 7 defines 'What counts as a dwelling', and sub-para 7(2) states: (2) A building or part of a building counts as a dwelling if—(a) it is used or suitable for use as a single dwelling, or

(b) it is in the process of being constructed or adapted for such use.

Procedural issue – admissibility of argument whether chattel or land

[27]During the litigation, HMRC’s primary argument has been that the Unit is a chattel and not part of the land. On that basis, they argued it does not count as a “chargeable interest” and so cannot count as a dwelling pursuant to paragraph 2(5) Schedule 6B. Therefore, they argued that the transaction on 12 April 2023 only concerned one dwelling for the purposes of MDR. Part of HMRC’s reasoning for the Unit being a chattel was their view that it can be removed intact i.e. it is mobile.

[28]This argument was not raised during the enquiry. HMRC’s closure notice states that the Unit is “not moveable”. A review conclusion letter dated 4 July 2024 said the same. Mr Lambourne challenged HMRC’s ability to change its position on this point in the litigation.

[29]The Tribunal heard submissions on this issue during the hearing. HMRC cited Clark v Revenue and Customs Commissioners

[2020] EWCA Civ 204

at [106]: The correct approach was in my judgment that stated by Kitchin LJ (as he then was) in the Fidex case at [45], in the context of an appeal from a closure notice: "In my judgment the principles to be applied are those set out by Henderson J [in the Tower MCashback case, at first instance] as approved by and elaborated upon by the Supreme Court. So far as material to this appeal, they may be summarised in the following propositions:(i) The scope and subject matter of an appeal are defined by the conclusions stated in the closure notice and by the amendments required to give effect to those conclusions.

(ii) What matters are the conclusions set out in the closure notice, not the process of reasoning by which HMRC reached those conclusions.

(iii) The closure notice must be read in context in order properly to understand its meaning.

(iv) Subject always to the requirements of fairness and proper case management, HMRC can advance new arguments before the FTT to support the conclusions set out in the closure notice.”

[30]HMRC argued that the “conclusion” of the closure notice was that MDR did not apply. Their position is that there are two subtopics in their reasons for this conclusion:(1) Whether the Unit formed part of the land; and

(2) Whether the Unit is suitable for use as a dwelling.

[31]HMRC regarded these as reasons for the conclusion. They accepted that the closure notice’s reasoning only addressed the second reason.

[32]Mr Lambourne’s submissions on this point questioned the fairness of letting HMRC change their argument after closing the enquiry.

[33]First, applying the principles from Clark and Fidex noted above, particularly [45] (i) and (iv) the Tribunal must consider what we regard as the conclusion of the closure notice. We note that the enquiry into the Return concerned its amendment. The closure notice explicitly states that it does not accept that amendment and so disallows the claim for MDR. In our view, this is the conclusion – rejection of the amendment introducing MDR. This amounts to a conclusion that MDR is not available. Further, this conclusion entails HMRC’s assertions that(1) the Unit is not part of the land and

(2) it would not be suitable for occupation as a single dwelling. The legislation set out at paragraphs ‎21 – 26 above shows that the question of whether the Unit is part of the land is a necessary consideration in any analysis of whether MDR is available. Therefore these issues are within the scope of the appeal before the Tribunal.

[34]In any event, it is open to HMRC to raise new arguments for their conclusions during litigation. As noted in the quotation above, this is “subject…to the requirements of fairness”. The argument that the Unit is a chattel, rather than part of the land was in HMRC’s statement of case. HMRC filed the statement of case on 20 March 2025, over a year before skeleton arguments were due and the hearing took place. In our view, this gave Mr Lambourne sufficient notice of the argument to prepare for it. Therefore, we are satisfied that the requirement of fairness is met.

[35]Therefore, we find that HMRC can raise the chattel vs. land argument and we consider it in this decision. Whether unit is a chattel or part of the land Discussion of the law

Whether unit is a chattel or part of the land

[36]We agree with HMRC’s position, for the reasons set out above, that in order to benefit from MDR the Unit must be part of the land.

[37]HMRC correctly directed the Tribunal towards land law cases to interpret the meaning of an “estate, interest right or power in or over land” in s.48. We reviewed the following cases cited by HMRC in considering whether the Unit is part of the land.(1) Hellawell v Eastwood [1851] 155 ER 554 (“Hellawell”)

(2) Holland v Hodgson [1872] 5 WLUK 58 (“Holland v Hodgson”)

(3) Elitestone v Morris

[1997] 1 WLR 687

(“Elitestone”)

(4) Chelsea Yacht & Boat Company Ltd v Justin Pope

[2000] 1 WLR 1941

(“Chelsea Yacht”)

(5) Royal Parks Ltd v Bluebird Boats Ltd

[2021] EWHC 2278 (TCC)

(“Royal Parks”)

[38]We have also considered Wessex Reserve Forces and Cadets Association v White [2006] 1 P. & C.R. 22 (QBD) (“Wessex”)which is cited in Royal Parks.

[39]In Royal Parks the High Court provided this summary of the case law at [77]:(i) The structure will be treated as being part of the land if: (a) the degree of annexation is such that the structure is permanently fixed to the land and can only be removed by a process of demolition; and (b) the purpose of such annexation must be that it should form part of the land.

(ii) The structure will be treated as a chattel if it sits on the land but is otherwise unattached, unless there is objective evidence that it was intended to form part of the land

(iii) Where the structure is annexed to the land but potentially removable, it will be treated as being part of the land if the purpose for which it was annexed was the permanent and substantial improvement of the land; but it will be treated as a chattel if the purpose for which it was annexed was temporary or for the more complete enjoyment and use of it as a chattel.

(iv) The test as to the degree and purpose of such annexation is an objective one; it is not determined by the subjective intention of the parties or any contractual arrangements between them. Throughout the rest of this decision we refer to these as “[77](i)” etc.

[40]The tests in Royal Parks at [77] identify three situations to consider.(1) [77](i) This is where the structure is “permanently fixed to the land and can only be removed by a process of demolition”. For the reasons set out at paragraphs ‎66 to ‎73 below, we do consider that the Unit meets this description. Therefore the situation in [77](i) does not apply here.

(2) [77] (ii) This is where a structure sits on the land, but is otherwise unattached. This situation prompts consideration of “objective evidence that it was intended” to form part of the land. In our view for the reasons set out below this is the test that is most likely to be relevant to this case.

(3) [77] (iii) This is where the structure is annexed to the land, but potentially removable. In our view, this test could be an appropriate one to apply here in light of the mains connections. This prompts consideration of the “purpose” for which it was annexed.

[41]If [77](ii) applies then the burden of proof is on the Appellants, if [77](iii) applies the burden of proof is on HMRC – see Holland v Hodgson at [335]: Perhaps the true rule is, that articles not otherwise attached to the land than by their own weight are not to be considered as part of the land, unless the circumstances are such as to shew that they were intended to be part of the land, the onus of shewing that they were so intended lying on those who assert that they have ceased to be chattels, and that, on the contrary, an article which is affixed to the land even slightly is to be considered as part of the land, unless the circumstances are such as to shew that it was intended all along to continue a chattel, the onus lying on those who contend that it is a chattel.

[42]In our view, in practical terms, it is clear from the wording of both [77](ii) and [77](iii) in Royal Parks that we must look at how far a structure is connected to the land (whether it is there by force of gravity or some other kind of connection), and why it is on the land.

[43]This approach is also borne out by looking at Hellawell and the case law examined in Royal Parks before setting out the tests at [77]. The starting point is Hellawell. Here the Court set out two considerations [emphasis added]: …first, the mode of annexation to the soil or fabric of the house, and the extent to which it is united to them, whether it can easily be removed integrè salve et commode or not without injury to itself or the fabric of the building; secondly, on the object and purpose of the annexation, whether it was for the permanent and substantial improvement of the dwelling, in the language of the civil law, perpetui usus causa, or in that of the year book, pour un profit del inheritance, or merely for a temporary purpose and the more complete enjoyment and use of it as a chattel. [In later cases the mode of annexation forms part of what is referred to as the degree of annexation.]

[44]In Holland v Hodgson, the Court accepted this as a statement of “the true principles”. It provided a more streamlined test. It considered “intention” as fundamental to the question of whether something was land, and identified two circumstances that indicate that intention. These were(1) the “degree of annexation” and

(2) the “object of annexation”. Elitestone applied this test, using the word “purpose” interchangeably with or alongside “object”, for example, at [699]: If one considers the object or purpose which the structure serves by being placed where it is…

[45]In Elitestone, the House of Lords held that a bungalow resting on its own weight had a sufficient degree of annexation. It went on to consider the purpose, as an indicator of intention, see [693] and [698] to [699].

[46]The Court in Royal Parks drew heavily on Elitestone in articulating its test at [77](ii) where structures sit on a site based on their own weight. The Court in Royal Parks at [70] cited those discussions of “intention” as requiring consideration of the “mode of annexation”.

[47]The Courts considered several questions in Royal Parks, Elitestone, Chelsea Yacht Co and Wessex when considering degree of annexation and looking to identify the purpose of annexation. We also consider those questions below and our conclusions are relevant to whether this case falls within [77](ii) or [77](iii).

[48]When considering “purpose”, the parties did not provide any submissions on the relevant point in time – e.g. the moment when the Unit was brought onto the land (the time of installation), or a later point such as the time of purchase (the effective date of the transaction). In our view, it is appropriate when determining purpose to focus on the Property as it was at the time the Unit was installed. We have not identified any part of the case law we have considered that suggest it is appropriate to consider a later time. That must be because, to do otherwise would seem to retrospectively import purpose. However, in case we are wrong and so that we address Mr Lambourne’s submissions we have also considered the effective date of the transaction. Application of the law Degree of annexation – is the Unit attached to the land?

Application of the law

[49]The bungalow in Elitestone had a main electric supply cable and drain pipes. Lord Clyde noted this at [694]. He theorised that this might be an “actual attachment” to the land. However, the parties in that case proceeded on the basis that the bungalow was not physically attached to the land, so his judgment dealt with that scenario only.

[50]We have considered Mr Lambourne’s description of the mains connection and the Unit being “properly plumbed in” in light of this comment. We accept that these substantial connections were in place at the effective date of the transaction. Whether they were in place at the time of installation is unclear.

[51]We were shown an undated hand-drawn plan that included the following annotation “TEMP SUPPLIES TO MOBILE. ELECTRICITY + WATER”. This could suggest that at an earlier time and therefore closer to the time of installation the supplies were temporary. This suggests they would be simpler to disconnect than proper plumbing in. We cannot say definitively from this plan whether the more substantial plumbing and electricity came later or at the time of installation.

[52]In any event even without these connections, the Unit rests on concrete pillars on the land. This is similar to the bungalow in Elitestone, where the House of Lords went on to consider the purpose of annexation. The similarity is why we think that [77](ii) is the test that is most likely to be relevant to this case.

Degree of annexation - would removing the Unit damage it significantly?

[53]This is addressed in the discussion on purpose – see paragraph ‎66.

Degree of annexation – would removing the Unit injure the land of the Property?

[54]There are references in the case law to the removal of an item damaging the surroundings. This occurs in the context of looking at the degree of annexation.

[55]In Hellawell, the Court considered whether cotton-spinning machines screwed into the floor were chattels or part of the land. The Court used similar wording, finding that a machine could be removed “without injury to itself or the fabric of the building”. Overall, it found they were chattels.

[56]In Holland v Hodgson, looms needed to be removed from the floor. This involved removing nails from plugs or beams. The Court found that this could be done “without any serious injury” to the floors. Nevertheless, they held that the looms were part of the land. This was on the basis of the purpose of the annexation.

[57]In Chelsea Yacht at [25], the Court of Appeal held: Turning firstly to the degree of annexure, it is important to bear in mind that what is required is sufficient attachment to the land so the chattel becomes part of the land itself. … The houseboat could be moved quite easily without injury to itself or the land.”

[58]Mr Lambourne submitted that removing the Unit would involve damage to the land. He drew the Tribunal’s attention to the trees that have grown up around the Unit. He stated that these would need to be felled before any attempt to remove the Unit because the only way of moving the Unit was vertically.

[59]HMRC submitted that the photos showed trees on one side of the Unit. Therefore, they submitted that it is still possible to remove the Unit using appropriate equipment despite the trees.

[60]There was no expert evidence on the process for removing the Unit or a professional’s approach to the trees as part of that process. Therefore, the Tribunal has had to assess the facts as best it can from oral evidence and the photographs provided.

[61]As with intention or purpose the parties did not make submissions about at which point in time to consider whether removing the Unit would injure the land of the Property. Again for the reasons noted above, it seems appropriate to focus on the time of installation. At the point of installation the trees would have been less developed. They do not appear to have impeded installation. We have seen nothing to suggest that they would have then prevented removal. Accordingly, our primary finding is that the Unit could have been removed at the time of installation without any injury to the trees.

[62]We then turn to the position at the effective date of completion. We explain above the photographs in the bundle. It is the photographs that Mr Lambourne took more recently that show the trees the best. For the purpose of our current consideration we are satisfied that although the photographs were taken more recently the trees would not have been materially different at the effective date of completion. From the relevant photographs we can see that the trees have grown in a way that branches (though not the trunks) overhang the Unit, but do not enclose it from both sides. With respect to Mr Lambourne he did not provide a detailed explanation of why the trees would have to be felled, as opposed to pruned or tied back or even simply for the Unit to be lifted carefully through the branches, to facilitate a vertical removal of the Unit. Based on the photographs our view is that any obstacle they present to removal could be managed without felling the trees entirely. It appears to us that is because vertical removal would be possible with only tying back, pruning foliage, potentially even removing specific branches or carefully lifting the Unit through the branches. We do not regard this as sufficient to cause injury to the land.

[63]Mr Lambourne also said that it would not be possible to get a large enough vehicle into position to move the Unit. Again this was clearly not an issue at the time of installation.

[64]We also considered whether, at the effective date of the transaction, this meant that the removal process using such a vehicle would result in “injury” to the land of the Property. We can see from Mr Lambourne’s and the Zoopla photographs that the Property benefits from a generous driveway and front garden. Looking at both sets of photographs we are satisfied, and find as fact, that there is sufficient space to accommodate at least one or two large vehicles that would appear to us to be required to move the Unit. That is because we can see the space available relative to the Unit, the double garage and the house. For example, there is ample space for a vehicle with a flat bed large enough for the Unit to sit on and a cab to pull such a flat-bed and/or a crane. There is a fence and gate across the driveway that the vehicle would have to go down. This fence and gate might not accommodate a large heavy goods vehicle. However, in evidence Mr Lambourne confirmed that this fence was added after the effective date of the transaction. Therefore we have not considered it further. There is a hedge that might interfere with a large vehicle turning into the area with the Unit. However, as with the trees, this could be pruned if needed. In our view this would not constitute “injury” to the land of the Property. Accordingly, we find that the concerns Mr Lambourne raised around large vehicle access do not indicate any other “injury” to the land of the Property.

Degree of annexation – conclusion

[65]Taking the points on degree together, we find that the degree of annexation of the Unit to the land is such that it is necessary to consider the purpose of that annexation.

Purpose - would removing the Unit damage it significantly?

[66]In Elitestone, discussed at [69] to [73] in Royal Parks, Lord Lloyd placed considerable weight on this question: A house which is constructed in such a way so as to be removable, whether as a unit, or in sections, may well remain a chattel, even though it is connected temporarily to mains services such as water and electricity. But a house which is constructed in such a way that it cannot be removed at all, save by destruction, cannot have been intended to remain as a chattel. It must have been intended to form part of the realty. … “It is agreed in the present case that as matter of fact that “the bungalow is not removable in one piece; nor is it demountable for re-erection elsewhere.” That agreed finding is in my view one powerful indication that it is not of the nature of a chattel.

[67]Similarly, Lloyd Clyde said: That the bungalow was constructed where it is for the purpose of a residence and that it cannot be removed and re-erected elsewhere point in my view to the conclusion that it is intended to serve a permanent purpose. If it was designed and constructed in a way that would enable it to be taken down and rebuilt elsewhere, that might well point to the possibility that it still retained its character of a chattel. That the integrity of this chalet depends upon it remaining where it is provides that element of permanence which points to its having acceded to the ground.

[68]This question was also considered in Royal Parks and in Wessex, which provided guidance on the level of damage in removal that would point to a purpose or intention of becoming part of the land. In Royal Parks at [83] and [84] the Court accepted evidence (concluding at [84]) that removal of a boat-house’s superstructure: …would result in substantial destruction of its components, such that any re-use elsewhere would be the salvage of parts and not the reinstatement of the whole. Although the removal operation could be carried out so as to preserve significant materials from the building, this would not be limited to simple dismantling and re-assembly of those parts. Very significant additional works and components would be required to provide foundations, a floor, a roof, internal layout and services for the same. This would amount to a new construction using reclaimed materials.

[69]Mr Lambourne submitted that it would be impossible to move the Unit without dismantling it. He noted the extended time that the Unit had been in place. However, he did not make any particularised statements about why the Unit could not be moved without damage nor take us to anything in the photographs that suggested there would be difficulty moving the Unit without damage.

[70]HMRC submitted that it could be removed using appropriate equipment, e.g. a crane and a specialist vehicle for moving static caravans. HMRC’s view was that the physical integrity of the Unit did not depend on it remaining in its current location. Therefore, HMRC argued that the Unit in this case is different to the bungalow in Elitestone and the boathouse in Royal Parks.

[71]On balance we accept HMRC’s submissions on this point. Elitestone and subsequent cases treat significant damage through removal as evidence of permanence. We have described the Unit above. From that description and the photographs we have seen we are satisfied and find that the Unit is a single structure designed to maintain its structural integrity so that it is generally capable of being moved. As indicated above we were not told or shown anything to dissuade us of this view. A specialist vehicle may be required to move the Unit. However, for the reasons given that removal would not involve the necessary level of damage to suggest permanence in the analysis of purpose. It would not even require dismantling and reassembly. We make this finding on the damage caused by removal for both the date of the Unit’s installation and the effective date of the transaction.

[72]For completeness, we note that Royal Parks also cited Wessex. Here the Court held one of the structures was part of the land due to the level of damage involved in moving it. At [76] Royal Parks summarised the consideration of damage levels at in Wessex. A significant factor was that, although the unit could be dismantled and re-assembled elsewhere, such exercise would be relatively labour intensive and a not inconsiderable number of components would require replacement.

[73]We have examined Wessex. We note that the replacements identified including electrical and plumbing services. That may be true here based on Mr Lambourne’s evidence around the Unit’s utility connections. However, in Wessex, all the related items, e.g. sanitary fittings and basins needed replacing. Mr Lambourne’s evidence did not indicate that this would be the case for the Unit. Also, in Wessex there were significant additional elements that could not be re-used, e.g. roofing sheets and rotten components. Therefore, we do not regard Wessex as impacting our conclusion above.

Purpose - role of planning permission

[74]The Court in Royal Parks considered an application for planning permission when assessing evidence of purpose. This described plans to replace the boathouse. The Court held that this indicated a purpose of “permanent and substantial improvement of the land”.

[75]The parties directed the Tribunal towards a grant of planning permission. This was for: …erection of conservatory and minor alterations together with new mini sewage treatment plant and residential caravan.

[76]Mr Lambourne argued that the planning permission demonstrated the intention for the Unit to be on the Property permanently as a dwelling. He submitted that it is only necessary to get planning permission for a structure that is on a site permanently. He submitted that the planning permission grants the right to have someone living there permanently. He also highlighted that the Property is Grade II listed. He submitted that it would only be possible to have the Unit on that Property with planning permission.

[77]HMRC argued that the planning permission does not indicate permanence. They submitted that it only permits a caravan, not any other structure, and does not make any reference to permanence. They provided the Tribunal with various references to legislation governing caravans. They particularly drew our attention to s.29 Caravan Sites and Control of Development Act 1960. This provides a definition of “caravan” which includes a requirement that they be “capable of being moved from one place to another” in various ways. They submitted that this means the planning permission envisaged a moveable item being brought onto the land.

[78]We can see the force of Mr Lambourne’s logic on this point. However, we are mindful that they are submissions predicated on planning law. We note also that there are no restrictions or conditions in the planning permission that suggest it is allowing a time-limited use of a caravan. Instead the permission appears open-ended and so on the face of it appears to encompass permanent occupation.

[79]Neither party provided detailed submissions on planning legislation or case law. This limits our insight into the situations that might require planning permission to have a mobile home or caravan within a property’s grounds. Unlike in Royal Parks the planning application form provided no material insights on this point either. Therefore, whilst we accept that the existence of the planning permission is suggestive of a purpose involving permanence without more, it is difficult to place much weight on it.

[80]For completeness, we note that even if an item is capable of being moved, this does not automatically imply an intention to move it at some point. Therefore, we reject HMRC’s submission that the use of the word “caravan” inherently precludes permanence.

Purpose - what type of structure is the Unit?

[81]Finally, we turn to a question that the Courts have described as the “genus”. This was effectively where they looked at the relevant structures and expressed a view on what they were. In Elitestone they regarded the bungalow as a “dwelling-house”. In Wessex, the court decided that the structure was an “assembly hall”.

[82]In our view, the Unit is a mobile home. It appears to have been constructed to be capable of being moved repeatedly (although probably not frequently) as a single whole. It does not have wheels or a tow bar. However, it is a structure of the kind that can be put on an open-topped lorry or a wheeled platform for towing. Therefore our view of what the Unit is does not suggest permanence as a part of the land.

[83]We note that the House of Lords in Elitestone explicitly discussed mobile homes as a point of contrast with the bungalow in question at [690]. ‘For the photographs show very clearly what the bungalow is, and especially what it is not. It is not like a Portakabin, or mobile home. The nature of the structure is such that it could not be taken down and re-erected elsewhere. It could only be removed by a process of demolition. This, as will appear later, is a factor of great importance in the present case.’

Conclusion on whether chattel or part of the land

[84]In light of the foregoing, we find that the Unit is a chattel. More particularly:(1) Considering [77](ii) we are not persuaded on the balance of probabilities that the objective evidence shows that the Unit was intended to form part of the land.

(2) Considering [77](iii) we are not persuaded on the balance of probabilities that when considered objectively the evidence shows that the purpose for which the Unit was annexed was the permanent and substantial improvement of the land. In making these findings we have not relied on the burden of proof.

Consequences of the Unit being a chattel

[85]As the Unit is a chattel, its purchase is not within the scope of SDLT. It is common ground between the parties that the £850 paid in respect of contents in the Property’s sale contract did not include the Unit. Mr Lambourne said that the Unit was included in the purchase price of £1,010,000 for SDLT purposes. Although Mr Lambourne provided no documentary evidence of this, we accept Mr Lambourne’s evidence: we consider that it is inherently unlikely that the vendor ‘gave’ the Appellants the Unit. Further, HMRC did not seek to establish that the Appellants had made a payment other than the purchase price and the £850 to the vendors of the Property. We note that in their skeleton argument that HMRC accepted that if Mr Lambourne established that part of the purchase price of the property was for the Unit then the SDLT due would need to be reduced i.e. the SDLT due will need adjustment to remove the value of the Unit from the chargeable consideration. Suitability for use as a single dwelling

[86]Our finding on the chattel vs. land argument is sufficient to dispose of this appeal. However, we will deal briefly here with the other, and until the Statement of Case was filed, main argument advanced by HMRC – that the Unit was not suitable for use as a single dwelling.

The Law

[87]Schedule 6B paragraph 7, noted above, requires that a building be “suitable for use as a single dwelling” to qualify for MDR purposes.

[88]Fiander and Brower v HMRC

[2021] UKUT 0156

at [48] sets out various principles for assessing the required suitability. (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.

[89]The parties’ submissions focussed around principles (5) and (6) in relation to privacy. We shall do likewise, but will consider the other elements briefly as well. For this analysis we are solely concerned with the effective date of the transaction.

[90]Mr Lambourne cited the case of Winfield v Revenue and Customs Commissioners

[2024] UKFTT 734 (TC)

(“Winfield”) in support of his position on privacy. HMRC sought to distinguish this case.

[91]We regard the relevant sections of Winfield as [23] to [26].23. HMRC submit that an occupier in the country would expect a greater degree of privacy than one in the urban context, and that an occupier of these dwellings would expect a greater degree of privacy than is afforded by the physical configuration of the dwellings.

24. Whilst it is clear that the test is not one size fits all, we are suspicious of the principle that an occupier of rural property would expect a greater degree of privacy than an occupier of urban property. In our view privacy is a relative quality and the weight to be attached to it depends on the characteristics of the objective occupier.

25. We take judicial notice of the fact that in many small rural developments involving barn conversions, separate dwellings are built, cheek by jowl, with plate-glass windows, around a single courtyard, where occupants of one dwelling can readily see into the rooms of another. Yet these dwellings fly off the shelves. Any perceived lack of privacy in this rural context does not seem to affect the willingness of purchasers to acquire such properties.

26. And in that context, as in this appeal, privacy can be readily secured by the use of curtains and blinds.

[92]The core of HMRC’s argument here was that the occupants of the house and the Unit would have clear views into each other’s residences. HMRC submitted that the occupants would have to obscure the windows of the respective living spaces to achieve privacy. This would involve removing the natural light sources for those areas.

[93]Mr Lambourne argued that the level of privacy in the Unit and the house would be acceptable to occupants generally in the rural context. He submitted that in urban areas, e.g. terraced houses or flats, there is a high degree of being overlooked.

[94]HMRC sought to distinguish Winfield from the current case on the basis that Winfield involved two semi-detached buildings, in contrast to the Unit being “in the front garden” of the house here.

Discussion

[95]It was not in dispute that the Unit provides facilities for sleep, washing (including attending to personal hygiene) and preparation of food described more particularly above. This was evident from the Appellant’s photos of the Unit. The Zoopla listing photos did not show the inside of the Unit. However, there was nothing in the evidence to suggest, nor did HMRC suggest that there had been, material alterations to the Unit after the effective date of completion. Therefore we find that the Unit provided these facilities at the effective date of the transaction.

[96]The Unit is self-contained.

[97]As HMRC noted, Winfield is an FTT judgment and so not binding on us. However, we accept the logic of its reasoning and so find it persuasive.

[98]We are not persuaded by HMRC’s proposed distinction between this case and Winfield based on the Unit being a mobile home rather than a house. The reasoning in the paragraphs set out above concerns privacy in general. We do not see it as being materially affected by the structural nature of the Unit.

[99]A relevant point from Mr Lambourne’s evidence concerns the Unit’s windows. The photos did not show any curtains on them. However, he stated that they had been taken down for cleaning when the photos were taken. He confirmed they were in place on the effective date of the transaction. We accept Mr Lambourne’s evidence on this point.

[100]From the photos, we find that it is possible for the occupants to look into each other’s residences. However, in line with Winfield, we do not find this undermines privacy sufficiently to affect the Unit’s suitability as a single dwelling.

[101]HMRC described the Unit as “in the front garden” of the house. We note from the photos that the Unit sits on the other side of the main driveway going from the Property’s entrance to the garage. This is a substantial driveway that can accommodate vehicles. Visually, the driveway creates a separation from the area with the Unit. Therefore, a description of the Unit as being in the “front garden” is not a complete reflection of the site as it appears in the photos. Again, in our view privacy is not undermined sufficiently to affect the Unit’s suitability as a single dwelling. Conclusion on

Suitability for use as a single dwelling

[102]Considering the circumstances and factors above, if it remained for us to determine, on balance our conclusion would be that, at the time of completion the Unit is suitable for occupants generally. Therefore, the Unit would meet the test in paragraph 7(2) of Schedule 6B. However, in light of our finding that the Unit is a chattel, it is not a “chargeable interest in or over a dwelling” under paragraph 2(5) of Schedule 6B. Therefore the question of “suitability for use as a dwelling” does not arise.

Conclusion

[103]For the reasons given, it is our view that MDR is not available because the Unit does not constitute land. However, we accept that the purchase price for the Property included payment for the Unit. Consequently, the SDLT due will need adjustment to remove the value of the Unit from the chargeable consideration. The parties should seek to agree the value of the Unit for SDLT purposes. If they are unable to reach agreement then they have liberty to apply to the Tribunal in relation to this issue.

Right to apply for permission to appeal

[104]This document contains full findings of fact and reasons for the decision. Any party dissatisfied with this decision has a right to apply for permission to appeal against it pursuant to Rule 39 of the Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009. The application must be received by this Tribunal not later than 56 days after this decision is sent to that party. The parties are referred to “Guidance to accompany a Decision from the First-tier Tribunal (Tax Chamber)” which accompanies and forms part of this decision notice. Release date: 02 July 2026