Jonathan Ralph, a South African businessman, relocated to the UK and purchased a £3.3m Derbyshire mansion set on 40 acres of land in 2020. He planned to live in an annexe at the property while renovation work on the main house took place.

Ralph had calculated the payable stamp duty land tax (SDLT) as £193,500 but eight months later HMRC launched an investigation into the transaction.

HMRC concluded in April 2022 that Ralph did not qualify for multiple dwellings relief (MDR) and owed a further £101,250, making the total SDLT £294,750.

To apply for MDR paragraph 7, Finance Act 2003 states that the second building has to be suitable for single dwelling use or in the process of ‘being constructed or adapted for such use’.

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