Shinebrook Ltd v The Commissioners for HMRC

This appeal concerns Stamp Duty Land Tax (“SDLT”) and, in particular, whether the transaction benefits from Multiple Dwellings Relief (“MDR”) for SDLT purposes.

The Appellant (“Shinebrook Limited) purchased a property at 1023 Garratt Lane (“the Property”) for consideration of £3,727,165. Prior to acquisition, the Property was used for commercial purposes as a “Timber and Builders Merchants”. On 1 April 2021, the Appellant was granted an option, in return for consideration of £3,600, to purchase the Property on or before 10 May 2021. The option price was to be in addition to the consideration for the Property. On 12 May 2021, the Appellant exercised the option and completed the purchase. On 13 May 2021, the Appellant submitted an SDLT return and enclosed tax of £37,442. The SDLT return filed by the Appellant described the Property as ‘mixed-use’, and claimed MDR. The Effective Date of Transaction (“EDT”) was stated as being 12 May 2021. The Appellant submits that on 30 April 2021, the seller had engaged “Roskerry Buildings Limited” to prepare the building on the site for conversion to 17 dwellings, and that the seller had commenced work which was continued by the Appellant.

The Appellant appeals against a closure notice issued by HMRC under para. 23 of Schedule 10 to the Finance Act 2003 (“the Closure Notice”). The Closure Notice amended the Appellant’s SDLT return to charge additional tax, in the sum of £138,426, and concluded that:

Having carefully considered the evidence, and the submissions made by both parties, we dismissed the appeal. In this Decision, the legislation is cited so far as is relevant to the issues under appeal.

The substantive issues for consideration are:

As confirmed by the Upper Tribunal (‘UT’) in Shinelock Ltd v HMRC [2023] UKUT 107 (TCC) (‘Shinelock’), the matter in issue in relation to an appeal against a closure notice is the conclusion notified in the closure notice - albeit not limited to a stated reason for that conclusion - and the associated amendment arising from such conclusion. In Daarasp LLP & Anor v HMRC [2021] UKUT 87 (TCC) (“Daarasp”), at [24], the UT made clear that although there is a nexus between the conclusions in a closure notice and the consequential amendments implementing the conclusions, the two are distinct.

The burden of proof is on the Appellant to demonstrate that the conclusions stated in the Closure Notice are incorrect (i.e., that it was overcharged by the Closure Notice), otherwise the Closure Notice shall stand.

The standard of proof is the ordinary civil standard; that of a balance of probabilities.

The authorities to which we were specifically referred by the parties included:

The documents to which we were referred were: (i) the Documents Bundle consisting of 265 pages; (ii) the Authorities Bundle consisting of 106 pages; (iii) HMRC’s Skeleton Argument dated 27 January 2026; and (iv) the Appellant’s Skeleton Argument dated 17 February 2026 (HMRC did not object to the late service of this document).

On 1 April 2021, the Appellant was granted an option, by “Western Sunsets Comercio International LDA”, in return for consideration of £3,600, to purchase the Property for £3,727,165 on or before 10 May 2021. The payment of £3,600 was for the option grant. The option price was to be in addition to the consideration for the Property.

On 12 May 2021, the Appellant exercised the option and completed the purchase.

On 13 May 2021, the Appellant submitted its SDLT return, and enclosed tax of £37,442.

On 24 January 2022, Officer James Loades issued an opening notice, under para. 12 of Schedule 10 FA 2003, for the purpose of checking the SDLT return.

On 1 March 2022, the Appellant’s agent responded, with some enclosures.

On 14 March 2022, Officer Loades requested further information and evidence.

On 14 April 2022, the Appellant’s agent stated that the seller of the Property had already started demolition work prior to the Appellant purchasing the Property, and that the Appellant carried on with the demolition work on the day of completion. Attached to the letter was photographic evidence of the demolition work, as well as an invoice dated 30 April 2021 confirming that “Roskerry Buildings Service Limited” were contracted to undertake the demolition work. The letter further stated that that the Appellant hoped to sign the building contract within the next few weeks.

On 10 May 2022, Officer Loades issued the Closure Notice.

On 1 June 2022, the Appellant’s agent appealed on the basis that neither “SDLTM00400”, nor Schedule 6B(7)(2) FA 2003, expressly state that physical work must have been underway before the EDT. The agent believed that:

On 9 June 2022, Officer Loades issued his “View of the Matter” letter.

On 23 June 2022, the agent requested an independent review of the decision.

On 20 July 2022, HMRC issued the “Review Conclusion Letter”. The conclusion was that the Closure Notice was upheld.

On 21 July 2022, HMRC requested a stay in proceedings until after the final ruling of the UT appeal in Ladson.

On 25 August 2022, the Appellant made an appeal to the First-tier Tribunal (‘FtT’).

On 17 November 2022, the UT released its decision in Ladson.

On 5 February 2024, HMRC applied to the FtT for an “Unless Order” in respect of all appeals stayed behind the final ruling in the Ladson appeal, further requiring the Appellant to confirm whether it wished to proceed with its appeal following the final ruling in Ladson and, if so, requiring the Appellant to provide new and particularised Grounds of Appeal.

On 12 February 2024, the FtT granted HMRC’s application.

On 26 February 2024, the Appellant confirmed that it wished to proceed with its appeal, and submitted new and particularised Grounds of Appeal.

On 2 July 2024, HMRC applied for Further and Better Particulars.

On 1 August 2024, Further and Better Particulars were provided by the Appellant’s agent.

On 22 October 2025, the Notice of Hearing was issued to the parties.

In order to put the parties’ respective contentions into context, we start with the relevant statutory provisions.

The relevant law, in respect of SDLT, is set out in Part 4 FA 2003.

Section 42 provides that SDLT is charged on land transactions.

A “land transaction” is defined by s 43 as follows:

Pursuant to s 43(3), each of those chargeable interests represents different “subject- matter” of land.

Section 48 defines a “chargeable interest” as follows:

Section 49 provides that a land transaction is a “chargeable transaction” if it is not a transaction that is exempt from charge.

Section 46 deals with “options and rights of pre-emption”, as follows:

Section 55 sets out the amount of tax chargeable on the “relevant consideration” given for a chargeable transaction (i.e., the chargeable consideration for the transaction), as follows:

The rate at which SDLT is charged in respect of any land transaction therefore depends on whether the interest acquired is an interest in ‘residential property’, or not.

Section 55(3)(a) defines the “relevant land” as:

Section 116 provides the definition of a “residential property”, as follows:

Schedule 4ZA provides for higher rates of SDLT to be chargeable in respect of purchases of dwellings in certain specified situations. The definition of “dwelling” for this purpose (in para. 18 of Schedule 4ZA) is as follows:

The para. 18 definition is in the same terms as the definition of ‘residential property’ in s 116(1)(a), save that it applies to a ‘single’ dwelling.

A building counts as a dwelling if it is used or is suitable for use as a “single dwelling”.

Schedule 6B FA 2003 contains the provisions for “MDR”. The Schedule applies, inter alia, to a chargeable transaction if its main subject-matter consists of “an interest in at least two dwellings”. Sub-para. 2(2) of Schedule 6B provides that:

The focus of this appeal is a transaction within para. 2(2)(a).

Paragraph 3 of Schedule 6B divides all chargeable transactions into either “single dwelling transactions” or “multiple dwelling transactions”, as follows

Paragraph 4 of Schedule 6B provides for the calculation of “relief”. If it were found in this case that there was an acquisition of two dwellings, then paras. 4 and 5 of Schedule 6B provide that SDLT is charged as follows:

Paragraph 7 of Schedule 6B defines what counts as a dwelling, as follows:

Where MDR is available, the relief can lower the effective rate of SDLT by splitting the chargeable consideration between each dwelling, subject to a minimum SDLT charge of 1% on the total chargeable consideration.

Section 58D(2) provides that MDR “must be claimed in a land transaction return or an amendment of such a return”. Paragraph 6(3) of Schedule 10 provides that the time-limit for such a claim is twelve months from the date that the SDLT return was required to be delivered.

Section 77(1)(b) provides for “notifiable transactions”, as follows:

Section 108 deals with “linked transactions”, and provides that:

Section 81A provides, in respect of “linked transactions”, that:

Section 119 deals with the “effective date of transaction”, as follows:

On a notifiable transaction taking place, s 73 requires the purchaser to submit a land transaction return (i.e., an SDLT return) within 14 days of the EDT.

Paragraph 12 of Schedule 10, in relation to the “notice of enquiry”, provides, inter alia, for the time-limit for opening an enquiry being nine months of the ‘relevant date’ of:

Paragraph 23 of Schedule 10 provides for the completion of an enquiry by the issue of a “closure notice”.

The documents for the hearing, set out at [10] above, comprised pleadings, correspondence relating to HMRC’s enquiry and appeal correspondence.

Ms Lawrence’s submissions can be summarised as follows:

The Appellant’s submissions (as set out in the Grounds of Appeal) can be summarised as follows:

Mr Symons’ submissions (as set out in the Skeleton Argument) can be summarised as follows:

At the conclusion of the hearing, we reserved our decision, which we now give with reasons. We have considered any key points of disagreement in determining the facts as set out below. Our conclusions regarding the key submissions are set out in our “Discussion”, later.

The “Background Facts” are not in issue between the parties, save that the parties differ in view as to the conclusions that we should reach as a result. We, therefore, adopt the Background Facts, at [11] to [31] above, as our “Findings of Fact”, and do not repeat these here. Additionally, we are satisfied that the following facts were proved:

The Appellant appeals against a Closure Notice issued by HMRC under para. 23 of Schedule 10. The jurisdiction of the FtT is fixed - and defined - by the terms of the Closure Notice, as confirmed by the UT in Daarasp,at [25(7)]. In Shinelock, the UT pointed out that Daarasp had set out ten principles which could be drawn from the leading authorities in relation to the issue of “the matter in question” in a closure notice. The Closure Notice in this appeal arose as a result of HMRC’s conclusion that the Appellant’s purchase of the Property consisted, entirely, of ‘non-residential’ property, giving rise to additional SDLT of £138,426 due on the Purchase.

The Appellant had previously applied to have these proceedings postponed/adjourned. A renewed application for an adjournment was made by Mr Symons at the commencement of the hearing.

The decision as to whether or not to adjourn is a case management one involving the exercise of discretion, having regard to the overarching principles of fairness and justice. The decision must, of course, be a principled one. The Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009 SI 2009/273(“the Procedure Rules”) provide the framework for proceedings before the FtT. The case management powers of the FtT are provided for at Rule 5, as follows:

We proceed to deal with the postponement/adjournment applications made by the Appellant in these proceedings.

On 20 January 2026, the Appellant had made an application for a postponement of the hearing, and for revised directions for the submission of the Appellant’s Document Bundle, Authorities and Skeleton Argument. On the same date, the application for a postponement was refused by Judge Pettifer.

On 11 February 2026, HMRC provided a copy of the Authorities Bundle and requested that the FtT issue an “Unless Order” in respect of the Appellant’s failure to provide its Skeleton Argument. HMRC further requested that the Appellant confirm the attendees for the hearing. On the same date, Judge Sukul declined to issue an Unless Order as she was not satisfied that it was in the interests of fairness and justice to issue such an order. However, Judge Sukul stated that the issue of the Appellant’s failure to comply with the Tribunal’s Directions would be considered at the start of the hearing. The Appellant was further directed to confirm, by no later than 5pm on 13 February 2026, who would be attending the hearing on 17 February 2026.

On 13 February 2026, the Appellant made another application for a postponement (on medical grounds). On the same date, Judge Brooks refused the application in the absence of medical evidence to substantiate the claimed medical reasons affecting attendance. The Appellant was, once again, required to confirm its attendees for the hearing. By the date of the hearing, the Appellant had failed to provide either its Skeleton Argument, or list of attendees. The Appellant’s Skeleton Argument was provided by Mr Symons, who was instructed shortly before the hearing.

At the commencement of the hearing before us, Mr Symons renewed the request for an adjournment, on medical grounds. The issue as to whether or not to adjourn a hearing on medical grounds has been the subject of much adjudication and consideration.

In Fitzroy Robinson v Mentmore Towers [2009] EWHC 3870 (TCC) (‘Fitzroy’), at [8] to [9], Coulson J set out some of the factors that are relevant to an 11th hour application to adjourn a trial (and in particular upon how late the application is made). Each case must, however, turn on its own facts. Coulson J said this:

The application for an adjournment was made on the basis that Mr Richard Cardash, the director, had to attend a medical appointment. Mr Symons referred us to a letter from the Royal Brompton Hospital, dated 20 January 2026, in support of the application. Having considered the contents of the letter, we were satisfied that it did not provide an explanation for the absence of any of the Appellant’s witnesses. The letter clearly showed that an appointment took place on 16 February 2026. The date of the hearing was 17 February 2026. Therefore, the letter did not substantiate any claim to be unable to attend the hearing on 17 February for medical reasons.

More importantly, the Appellant had been directed to provide its list of attendees. The Appellant has continuously failed to provide its list of attendees. Mr Richard Cardash, his son (Mr Rupert Cardash) and Mr Gordon were all not in attendance, despite the refusal of an adjournment.

The Procedure Rules provide that:

It is clear that the Appellant had received notification of the hearing given the previous applications for a postponement/adjournment, which were refused. Having considered all of the information before us, cumulatively, we were satisfied that it was in the interests of justice to proceed with the hearing. This was not a hearing in absence as the Appellant was represented throughout the hearing. We, therefore, refused the application and proceeded to hearing the appeal.

On 20 and 24 February 2026, after the hearing had already concluded, the Tribunal received correspondence on behalf of the Appellant. This was a late (renewed) application to adjourn on medical grounds.The correspondence included medical letters and further evidence relied on in support of the appeal.

The correspondence dated 20 February 2026 was set out in the following terms:

Having considered the correspondence dated 20 February 2026, we firstly find that whilst the Appellant’s director refers to not being aware that medical evidence would be required to support an application for a postponement/adjournment prior to the hearing, this does not sit well with the decision refusing the postponement application, issued by Judge Brooks on 13 February 2026. Judge Brooks’ decision clearly states that the application would be refused in the absence of medical evidence. Secondly, we find that the suggestion that the Appellant was not afforded sufficient time to provide witness statements fails to have regard to the Standard Listing Directions issued by the Tribunal, which the Appellant failed to comply with despite the renewed Directions issued by Judge Sukul. Thirdly, whilst reference is made by the Appellant to only having 24 hours to instruct a KC, this fails to consider the fact that this hearing was listed a considerable period of time ago, giving the Appellant sufficient time to instruct a representative. The Appellant has always known when the hearing was scheduled to take place. Furthermore, it is clear that the Appellant was able to instruct Counsel as Mr Symons attended the substantive hearing and provided a Skeleton Argument to assist the panel.

The correspondence dated 20 February 2026 was accompanied by a letter (dated 18 February 2026) from Dr Rakesh Kapila, of South Kensington Clinic. The letter from Dr Kapila is set out in the following terms (and solely relates to Mr Rupert Cardash):

In Levy v Ellis-Carr [2012] EWHC 63 (Ch) (‘Ellis-Carr’), Norris Jgave guidance on the proper approach to the assessment of the medical evidence relied on in support of an adjournment application, as follows:

The guidance given by Norris J has been approved in a number of later decisions, including by Lewison LJ in Forresters Ketley v Brent [2012] EWCA (Civ) 324 (‘Forresters’), at [26], and again by the Court of Appeal in GMC v Hayat [2018] EWCA (Civ) 2796 (‘Hayat’), at [48].In the Forresters case, Lewison LJ said this, at [25]:

Hayat provides support for the proposition that, in considering the weight to be attached to a particular medical report, the court is entitled to look at it in light of the history and the other materials available to it. In that case, Lang J had allowed an appeal from a decision of the Medical Practitioners Tribunal on the basis that the tribunal had failed to adjourn proceedings against the appellant in light of a sick note he produced which advised that he was not fit for work.Lang J's decision was overturned by the Court of Appeal. Coulson LJ said, at [45], that Lang J appeared to conclude that because the sick note post-dated earlier evidence of the appellant's condition, “it somehow trumped all that had gone before it”.

At [56], Coulson LJ said this:

Whilst not suggesting that Mr Cardash does not suffer from anxiety, we find that the letter from Dr Kapila is in general terms and it is clear that the information set out by Dr Kapila in relation to the recent anxiety episode was as a result of self-reporting. This is evident from use of the words “I understand from the patient”. There is no suggestion that any mental state examination was conducted by Dr Kapila to support the conclusion that Mr Cardash was unable to take part in a hearing on 17 February 2026 due to an acute anxiety episode. The letter from Dr Kapila further does not provide any prognosis, whatsoever. Moreover, we find that the letter fails to set out when Mr Cardash would have been in a position to take part in a hearing where reasonable adjustments could have been made.

In Decker v Hopcraft[2015] EWHC 1170 QB (‘Decker’), at [27] to [28], the High Court said this:

As mentioned earlier, this was a late renewed application for an adjournment on medical grounds following the conclusion of the hearing. The case of Mohun-Smith v TBO Investments Ltd [2016] EWCA (Civ) 403 (‘Mohun-Smith’) emphasised that there is a material and important distinction between an application for an adjournment of trial, and an application to set aside a judgment entered in default because of the non-attendance of a party. The decision indicates that the court should not, in general, adopt too rigorous an approach to the question of whether a good reason has been shown for non-attendance in the context of an application to set aside a decision, but that a rigorous approach is justified in the context of an adjournment application.Lord Dyson MR explained why, at [26]:

As a general rule, a good reason will have to be demonstrated in order to secure an adjournment. There are strong practical and case management reasons for this, particularly in the contemporary litigation culture with its emphasis on efficiency and expedition.

The correspondence dated 20 February 2026 from the Appellant was further accompanied by a letter, dated 18 February 2026, from Mr John Paterson (Architect). The letter states that work started on the Property in April 2021. Despite being aware of the issues raised in the appeal from the time that the Review Conclusion Letter was issued, and despite the Directions issued by the Tribunal leading up to the hearing, the Appellant did not submit any evidence prior to the date of the hearing. Furthermore, the correspondence post-dates the hearing, was not supported by an application to admit late evidence and does not shed any real detail on the nature of the work that Mr Paterson was referring to as having commenced on the Property (i.e., whether it was ‘relevant’ work for SDLT purposes). We bear in mind that a key consideration to the admission of late evidence is its relevance; the presumption being that all relevant evidence should be admitted unless there is a compelling reason to the contrary: Mobile Export 305 Ltd & Anor v R & C Comrs [2007] EWHC 1737 Ch (per Lightman J). An application to admit late evidence must, however, be made in writing.

The correspondence from the Appellant, dated 24 February 2026, included a photograph of the same appointment letter from the Royal Brompton Hospital that Mr Symons had already provided. We have already determined that the appointment was for a date other than the date of the hearing when we refused to adjourn the hearing 17 February 2026. This letter does not, therefore, take the Appellant’s renewed application any further.

The full parameters of the case that the Appellant was required to meet were set out in the Review Conclusion Letter, and followed up by the Statement of Case. The issues were clear and narrow, and the Appellant has been provided with the opportunity to address the issues. The overriding objective is the overarching consideration within the Procedure Rules. This provides for, inter alia, dealing with a case in light of the complexity of the issues and the costs provides that:

The parties have a duty to assist the Tribunal in furthering the overriding objective. The Appellant has failed to do this and now seeks to cure defects in the refusal to adjourn, and in its case, after the hearing had concluded. There is no merit in the argument that the Appellant has not had the opportunity to provide any evidence in support of its appeal.

We are satisfied that the written submissions made in the correspondence dated 20 and 24 February 2026 simply sought to remedy the defects of the renewed application for a postponement that had been made by Mr Symons at the commencement of the hearing. It is wholly insufficient for the Appellant to seek to cure the defects in the application, and indeed in its case, after the conclusion of the hearing.

The parties have diametrically opposed views as to what the acquisition in this appeal constituted.

HMRC submit there are two land transactions, and two EDTs, in this appeal:

In further amplification of these submissions, Ms Lawrence submits that the Appellant acquired the option to purchase non-residential property (i.e., EDT1). Upon exercising the option, the Appellant acquired that non-residential property (i.e., EDT2). HMRC therefore submit that the main subject-matter of the transaction was not “used or suitable for use as a dwelling”, or in the process of being “constructed or adapted” for such use. In reliance on Ladson, Ms Lawrence submits that there was no physicalmanifestation of the dwellings at the EDT2 (para. 7 Schedule 6BFA 2003). Therefore, Paragraph 2 Schedule 6B FA 2003 is not satisfied, and MDR is notavailable. Ms Lawrence also submits that no evidence of positive construction of the dwellings has been provided by the Appellant.

Ultimately, Ms Lawrence submits that the test is to consider whether, at the time of completion, the whole or part of a building was in the process of being constructed to be suitable for use as a dwelling. This is an objective assessment by reference to the facilities present or physical manifestations of construction of a building or buildings that will become multiple dwellings.

Mr Symons, alternatively, submits that prior to completion the seller had engaged Roskerry Buildings Limited (on 30 April 2021) to prepare the building on the site for conversion to 17 dwellings. Mr Symons further submits that the seller had commenced work, which was continued by the Appellant at EDT2.

We have considered the relevant statutory scheme as to whether the actual transaction answers the statutory description.

The correct modern approach to the interpretation of tax statutes is that the court's task - within the permissible bounds of interpretation - is to give effect to Parliament's purpose. In this regard, controversial provisions should be read in the context of the statute as a whole, and the statute as a whole should be read in the historical context of the situation which led to its enactment. In seeking the purpose of a statutory provision, the interpreter is not confined to a literal interpretation of the words, but must have regard to the context and scheme of the relevant Act as a whole.

The general principles of statutory interpretation were explained by Lord Hodge in R (O) v Secretary of State for the Home Department [2022] UKSC 3, [2023] AC 255, at [29] to [32]. The task is to identify the meaning of the words that Parliament has used. Words and passages in a statute derive their meaning from their context. A phrase or passage must be read in the context of the section as a whole, and in the wider context of a relevant group of sections. Other provisions in a statute - and the statute as a whole - may provide the relevant context. They are the words which Parliament has chosen to enact as an expression of the purpose of the legislation and are, therefore, the primary source by which meaning is ascertained. External aids to interpretation must play a secondary role. Explanatory Notes (prepared under the authority of Parliament) may cast light on the meaning of particular statutory provisions.

In Fanning v HMRC [2023] EWCA Civ 263 (‘Fanning’), at [30] (Peter Jackson, Lewis and Falk LJJ), the Court of Appeal said this:

For the purposes of interpreting the scope and application of the SDLT legislation, it is necessary that the legislation is construed ‘purposively’. We are further required to determine the nature of the transaction to which the taxing provision is intended to apply, and to then decide whether the actual transaction answers the statutory description.

SDLT was introduced as a new tax by Part 4 FA 2003. It replaced stamp duty in relation to land. The legislative framework is largely contained in FA 2003. There are three elements to the charge to SDLT:

SDLT is charged on the ‘chargeable consideration’ for the transaction; which is generally any consideration in money or money’s worth given for the subject-matter of the transaction - whether directly or indirectly - by the purchaser or a person connected with him. At the relevant time, SDLT returns were generally required to be submitted, and tax paid, within 14 days of the EDT; which is generally the date of completion (ss. 76 and 119 FA 2003). Unlike stamp duty, SDLT is a tax on transactions rather than documents, and is subject to a self-assessment regime. The transactional heart of SDLT is reflected in the structure of the taxation set out in FA 2003, which sets out detailed rules for determining when the charge arises on the land transaction.

A ‘dwelling’, in the MDR legislation (para. 7, Schedule 6B), refers to:

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 the land transaction. MDR has now been abolished, with effect from 1 June 2024.

With those principles in mind, we turn to the circumstances of this appeal. It is pertinent to note that the Appellant accepts that the Property acquired was a commercial building. This matter is not in issue between the parties. The matter for consideration is the nature of the chargeable interest that was acquired.

To qualify for MDR, a chargeable transaction must fall within either para. 2(2) or 2(3) of Schedule 6B, and must not be excluded by para. 2(4). Paragraph 2(2) of Schedule 6B provides for MDR to be available only where the “main subject-matter” of a transaction consists of an interest in two or more dwellings. Paragraph 7(2)(b) of Schedule 6B explains what is to count as a ‘dwelling’. Paragraph 7(2)(b) is not, however, the operative provision that provides for MDR to be available, but is part of a wider definition of what is to count as a dwelling that is used to answer the question posed by para. 2(2)(b), which involves a consideration of the nature of the chargeable interest acquired. The operative provision is, therefore, found in para. 2.

In Ladson, the UT said this, at [32] and [38]:

In Mudan, the only issue before the UT was whether the property was “suitable for use as a dwelling” at the time of completion of the purchase. The UT said this, at [48]:

And, at [58]:

The Appellant agrees that the UT’s decision in Ladson is relevant to the appeal. The UT in Mudan endorsed the approach in Ladson, at [46] to [47]:

In Ladson, the UT said this, at [43] to [44]:

Turning to the circumstances of this appeal:

In order to consider whether the transaction consisted of an interest in at least two dwellings, it is necessary to consider whether such buildings are “suitable for use as a dwelling”. Because of the arguments being relied on by the Appellant, it also necessary to consider whether a building was in the process of “being constructed or adapted” for use as a dwelling.

The Appellant submits that the Property was a dwelling for the purposes of para. 7(2)(b) of Schedule 6B because it was in the process of being constructed or adapted to use as a dwelling. The Appellant’s position is that the Property qualifies for MDR because planning approval was obtained to build 17 residential buildings on the Property, on 23 March 2021. We had the benefit of seeing the Planning Permission (Variation/Removal of Condition) from Wandsworth Council. The document is dated 23 March 2021 and refers to the Property. This does not, however, support a finding that the property was in the process of being constructed or adapted for use as a dwelling. This is because whilst obtaining planning permission can show the intention to build dwellings in the future, the planning permission only provides permission for it to be done and is not sufficient evidence to show that construction or works are underway. Importantly, the Appellant refers to construction/adaptation. This supports the conclusion that no buildings were being used (or were suitable for use) as a dwelling. Obtaining planning permission is not part of the construction/adaptation of a building.

By a letter dated 14 April 2022, the Appellant’s agent said this:

In support of the argument that the Property was in the process of being adapted for use as a dwelling, the Appellant relies on the statutory declaration (dated 30 April 2021) from Mr Jeffrey Field (Chartered Town Planner and Chartered Surveyor) as to the use of the Property. We have had the benefit of considering Mr Field’s statutory declaration. In his statutory declaration, he says this:

Whilst Mr Field states that he visited the site on 15 April 2021, it is not clear how he was able to observe the works that had been started by 1 May 2021 as that date is later than the date of his visit. Mr Symons was only instructed shortly before the hearing and he could not shed any further light on what Mr Field was trying to say in this part of his statutory declaration. In his skeleton argument, Mr Symons says this:

Whilst this may have been Mr Symons’ understanding of what Mr Field intended to say, a submission is not evidence. Despite the matters urged upon us by Mr Symons, we cannot use the skeleton argument to analyse what Mr Field intended to say. We acknowledge, however, that Mr Symons was only instructed shortly before the hearing and we are grateful to him for the assistance given during the hearing. We find that there is considerable force in Ms Lawrence’s submission that Mr Field’s statutory declaration does not describe what, if any, physical works were witnessed by Mr Field, and that all that Mr Field refers to is “demolition” and not “construction”.

We have also seen the witness statement, dated 13 March 2025, prepared by Mr Oliver Gordon. The witness statement states, inter alia, that:

Whilst Mr Gordon refers to a statutory declaration by BNP Paribas, no such statutory declaration has been provided in support of the appeal. Indeed, Mr Field does not state that he represents BNP Paribas.

In an email to the Tribunal on 1 August 2024, Cornerstone Tax say this:

We have already considered the fact that the only photographs that were submitted in this appeal were not date stamped.

We conclude, as the UT said in Ladson, thata building can only be said to be “in the process of being constructed” if there is some physical manifestation of what is ultimately to become that “building”. Without such physical manifestation, there might well be an intention to construct a future building, perhaps even a firm intention, but no building that is in the process of being instructed. This is not the situation that has arisen in the circumstances of this appeal. Whilst HMRC bear the burden of proof in relation to the validity of the Closure Notice, the Appellant (who has the burden of proving that he has been overcharged by the Closure Notices) has not sought to call any evidence in support of the appeal (at the time of the hearing). We have already considered the late evidence that the Appellant sought to rely on, which was submitted with the late, renewed application for an adjournment.

Having considered all of the evidence before us, cumulatively, we find that the Appellant has failed to establish that the Property was in the process of being constructed or adapted for use as a dwelling. Indeed, the documentary evidence relied on by the Appellant in this appeal has given rise to more questions, than answers. Consequently, therefore, the Appellant has failed to establish entitlement to MDR.

An option to purchase is an offer to sell, which is irrevocable for a stated period or until a stated event, made by the grantor of the option to the grantee (i.e., the Appellant). The grantee is entitled to convert the offer into a concluded contract to buy on giving the prescribed notice and complying with the conditions on which the option is made exercisable in any particular case. There must be a binding contract to keep the offer open, which requires either a deed or valuable consideration. The exercise of an option to purchase creates the relationship of seller and buyer from the date of the expiry of the notice exercising the option. The contract of sale arising from the exercise of the option will be an open contract, unless conditions of sale have been included in the option contract itself.

‘Options’ rights are interests in land, but do not count as ‘major interests’. The acquisition of an option, and the acquisition of a right of pre-emption, are land transactions (s 46 FA 2003) and a charge to SDLT can arise in accordance with s 48 FA 2003. The sale, variation or surrender of an option, or pre-emption right, constitute the acquisition of a chargeable interest so can also be chargeable to SDLT. In accordance with s 55(1) and (4) FA 2003, and ss 116(1) FA 2003, the nature of the option or right of pre-emption as residential, mixed-use or non-residential property follows the nature of the underlying property over which the option or right of pre-emption is acquired.

The acquisition of an option, or right of pre-emption, is distinct from any land transaction that may arise on the exercise of such option or right. The effective date of an option or pre-emption agreement is the date of the acquisition of the agreement, unless the option or right of pre-emption forms part of another land transaction (e.g., an option contained in a lease). At the time of the acquisition of the option, SDLT is charged on the option price paid at the rate applicable to that price. As the grant of an option is not a major interest in land, the transaction (on grant) is only notifiable if there is SDLT payable, or relief is being claimed. If the option is subsequently exercised, SDLT is charged on the consideration paid on exercise, but the rate of charge is calculated to include the price that was paid on the grant (i.e., at the time of exercise, the grant and exercise are treated as “linked transactions”).

Transactions are linked, for SLDT purposes, if they form part of a series of transactions between the same seller and purchaser (or, in either case, persons connected with them). If two transactions are linked, the consideration for the two transactions has to be regarded as a whole, for the purposes of determining the rate of charge applicable. This ensures that SDLT cannot be mitigated, or avoided, by splitting a composite acquisition into smaller parts, or splitting acquisitions between different (connected) purchasers. The fact that two transactions take place between the same seller and purchaser does not automatically mean that they are linked. There must be something else that connects the transactions, amounting to a scheme, arrangement or series of transactions. This is a question of fact.

The form in which transactions are documented does not determine whether they are linked. The rule may be applied retrospectively. In Attorney-General v Cohen (1937) 1 KB 478 (‘Cohen’), the Court of Appeal held that:

The legislative wording of s 108 FA 2003 is wider than the Cohen case. This is because the SDLT legislation links transactions that are simply part of a “single scheme” or “arrangement”. The Stamp Office appears to accept the principle that for transactions to be linked, there must be an attempt to split a composite transaction to secure an SDLT advantage. Any composite written or oral agreement, or a discount being offered for “bulk purchase”, indicates that transactions are linked for SDLT purposes. The question is whether the fact that the first transaction happened had affected the terms of the second transaction.

Linked transactions, with the same EDT, can be reported as a single notifiable transaction, using one SDLT return. Where completion occurs on different days, two or more returns should be made, with all returns noting that the transaction on a particular return is linked to other transactions.

The transaction to which the SDLT in dispute in this appeal relates is the purchase of the Property, as provided for in the contract of purchase, and completed by the transfer on 12 May 2021. The subject-matter of that transaction was of a property that was ‘non-residential’. We have found that no dwellings were in the process of being constructed. In accordance with ss 55(1), (4) and 116(1) FA 2003, the nature of the option or right of pre-emption follows the nature of the underlying property over which the option or right of pre-emption is acquired. The acquisition of the option by the Appellant is a land transaction. In accordance with s 45(3) FA 2003, the EDT of the option is 1 April 2021. It would not be regarded as the acquisition of a major interest in land. As no part of the consideration is chargeable at a rate of more than 0%, the acquisition of the option is not a notifiable transaction, in accordance with s 77(1)(b) FA 2003. Because the underlying land was non-residential property, the rates applicable to the option are those which apply to non-residential property. Therefore, the rates of SDLT at Table B of s 55 apply to the option.

The transfer pursuant to the exercise of the option on 12 May 2021 constituted a separate land transaction from the grant of the option. Pursuant to s 108 FA 2003, the two are linked transactions. Section 108 provides that:

Therefore, the amount of SDLT chargeable on the Property, in the circumstances of this appeal, is £175,868. The SDLT calculated on the original SDLT return was £37,442. The difference of £138,426 is the amount of SDLT due in the Closure Notice.

Accordingly, therefore, the appeal is dismissed and the Closure Notice is upheld.

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.