Whether a house and annex comprise multiple dwellings

The taxpayers bought a property consisting of a main house an annex garage and summerhouse. The main house and annex had living sleeping bathing and kitchen facilities. They were connected by an internal corridor with door jambs where a door could be hung. The annex did not have a separate post box utility supply or council tax bill. There was also a restrictive covenant over the land to prevent more than one bungalow being built on it.

The taxpayers claimed multiple dwellings relief (FA 2003 Sch 6B para 7) in their stamp duty land tax return but HMRC said the property did not qualify. The taxpayers appealed.

The First-tier Tribunal said the question as to whether both parts of the building were suitable for use as single dwellings was an objective one based on the physical attributes of the property at the relevant time. A...