MDR Application in Properties with Unique Features: Nicholas Rowe v HMRC Case

On 26 November 2025, the First-tier Tribunal (FTT) allowed an appeal concerning Multiple Dwellings Relief (MDR) for Stamp Duty Land Tax (SDLT), finding that a property comprising a main house and an annex qualified as two separate dwellings despite interconnecting doors and an unconventional shower arrangement within the kitchen. 

The appellant purchased a residential property in 2022. Initially, the appellant filed the SDLT return without claiming MDR and paid the tax accordingly. The SDLT return was later amended to claim MDR, which HMRC initially accepted but subsequently reopened an enquiry, issuing a closure notice that concluded MDR was not applicable and demanded additional tax plus interest.  

The key issue before the FTT was whether the annex and main house each constituted a "dwelling" suitable for use as single dwellings on the effective date of the transaction under Schedule 6B Paragraph 7(2) Schedule 6B of the Finance Act 2003 (the "Act"), entitling the appellant to MDR. 

The FTT allowed the appeal, finding both properties qualified as separate dwellings. 

Applying the multifactorial assessment established in Fiander v HMRC [2021] UKUT 156, the FTT examined the physical attributes of the property. The main house and annex were connected by two lockable interconnecting doors but also each had separate external entrances and independent utilities, including water supply, heating, and fuse boards The annex’s suitability was affirmed despite the shower being located in the kitchen, as the FTT found that a single occupier could maintain privacy, and ventilation concerns were comparable to conventional layouts. The lockable doors provided sufficient security and privacy based on their intrinsic capability. The FTT clarified that the test is whether the lockable door, if locked, is sufficient to keep the outside world at bay, and not on the assumption that someone in that outside world has a key to access the dwelling. 

Following Mudan v HMRC [2024] UKUT 307, the annex’s prior use as student accommodation, supported by a key fob labelled "Flat only," strongly indicated its suitability for use as a separate dwelling. The FTT found that the physical attributes such as living, kitchen, bedroom, and hygiene facilities weighed heavily in favour of MDR eligibility, overriding factors like the shared postal address and council tax banding. 

As a result, the appellant's SDLT liability was significantly reduced by £70,090. 

Read the full decision of Nicholas Rowe v HMRC [2025] UKFTT 1443 (TC) .