No higher rate SDLT relief, property not main residence

In Benjamin Cohen v HMRC [2023] TC8717, the First Tier Tribunal (FTT) found a property occupied for 10 days was not an only or main residence for SDLT purposes. Higher rates of SDLT were due on the purchase of a further property as it was not the replacement of an only or main residence.

• Mr Cohen completed the purchase of a long residential leasehold, Luna Court, on 30 October 2018.
• Mr Cohen filed an SDLT return on the basis that Luna Court was the replacement of his main residence at Sherrard Road and Higher Rates of SDLT were not due.
• The prior property, Sherrard Road, was purchased on 23 July 2018.
• Following its renovation, Mr Cohen moved in on 29 August for a period of 10 days.
• Mr Cohen sold Sherrard Road on 25 October 2018 to his parents.
• HMRC wrote to Mr Cohen and opened an enquiry into his SDLT return for the purchase of Luna Court.
• HMRC concluded that higher rates of SDLT were due on the purchase as Luna Court had not been the replacement of Mr Cohen's main (or only) residence.
• Following a Statutory Review an Appeal was lodged with the FTT.

The FTT found that:

• To qualify for relief from higher rates of SDLT, the London Property had to be Mr Cohen’s only or main residence.
• Sherrard Road was not Mr Cohen’s only or main residence as:
  • Being in occupation of the property was not the same as saying it is the only or main residence.
  • The intention to occupy Sherrard Road as a main residence changed prior to occupation, evidenced by a holding deposit being placed on Luna Court on 16 August 2018, prior to occupying Sherrard Road.
  • The short period of occupation was indicative that the occupation was temporary rather than permanent.
  • Mr Cohen departed Sherrard Road prior to the completion of the Luna Court purchase on 30 October 2018.

The appeal was dismissed.

Useful guides on this topic

SDLT: Residential property higher rates
A guide to the Stamp Duty Land Tax (SDLT) higher rate charge on residential property, when it applies and what reliefs are available to exempt buyers from the charge.

SDLT: Residential property higher rate: At a glance (freeview)
What Stamp Duty Land Tax (SDLT) rate applies for the purchase of a second home? What is the SDLT higher rate? Are there any reliefs from the SDLT higher rate?

Statutory Review (by HMRC)
What is a Statutory Review? Is it automatic? What happens in a Statutory Review? Can you challenge a Statutory Review's findings? Can you influence a Statutory Review? 

How to appeal an HMRC decision
Disagree with an HMRC decision? How to appeal, what type of decision can you appeal and what are your different options when you disagree with HMRC? What are the key steps in making an appeal?

External links

Benjamin Cohen v HMRC [2023] TC8717