In the case of Oakwood Great Oak Ltd v HMRC [2026] UKFTT 1138 (TC), the FTT has allowed the appeal against a closure notice that charged SDLT at residential rates on a dilapidated property bought for £2,400,000. The Appellant had submitted the SDLT return on the basis that the transaction was not residential on the grounds that, while the property had been built and used as a dwelling, it was now in such a poor state of repair that it was not suitable for use as a single dwelling at the effective date of the transaction (EDT).
STAMP DUTY LAND TAX – building previously used as dwelling in need of renovation and repair at time of completion of purchase – whether building “suitable for use as a single dwelling”
Noting that:
“the Tribunal must undertake an evaluative assessment of all relevant circumstances in order to determine whether, viewed objectively at the EDT, the Property retained the characteristics and identity of a dwelling.
In carrying out that assessment, we have had particular regard to the guidance provided by the Upper Tribunal in Mudan UT and endorsed by the Court of Appeal. However, no single factor is determinative and the exercise remains a multifactorial one directed to the statutory language.
… previous use is not determinative. As recognised in Mudan, a building which was once suitable for use as a dwelling may deteriorate to such an extent that it no longer possesses the characteristics and identity of a dwelling at the relevant date.
The issue is therefore whether the extent of deterioration affecting the Property at the EDT was such that it had crossed that line.”
Considering the various factors, the FTT concluded that:
“It is important to consider these matters cumulatively rather than individually. Viewed in isolation, none of the identified defects is necessarily decisive. Viewed together, however, they present a materially different picture.
This was not merely a dwelling awaiting renovation. Nor was it simply an unmodernised property requiring substantial refurbishment. Rather, by the EDT, the combined effect of prolonged vacancy, extensive deterioration, widespread asbestos contamination, significant structural defects, safety concerns, the fact that aspects of the necessary structural intervention carried a risk of causing further damage or deterioration to elements of the existing structure, and the exceptional scale and intrusiveness of the intervention required had fundamentally altered the character and identity of the Property.
Applying the multifactorial assessment required by Mudan, we are satisfied that the cumulative effect of those matters was that the Property had ceased to possess the characteristics and identity of a dwelling at the EDT. This conclusion is not based upon any single feature of the case, nor upon the economic desirability of redevelopment, but upon the cumulative effect of the conditions we have identified.
Although it remained externally recognisable as a former dwelling and although some form of remediation was theoretically possible, we conclude that by the EDT the Property had crossed the line contemplated in Mudan and was no longer suitable for use as a dwelling within the meaning of s.116(1)(a) FA 2003.
We therefore find that the Property was not residential property at the EDT.”
https://caselaw.nationalarchives.gov.uk/ukftt/tc/2026/1138
Related content from Claritax Books
Stamp Duty Land Tax is a well-written, user-friendly guide to the complexities of SDLT, written for accountants, solicitors and other tax professionals, with plenty of worked examples. Topics covered include basic principles, leasehold transactions, partnerships, trusts, reliefs, anti-avoidance legislation and recent tribunal decisions. Full reference is made throughout to relevant legislation, case law and guidance from HMRC.
