BTR Core Fund JPUT v The Commissioners for HMRC

Case A in paragraph 34A of Schedule 10 to the Finance Act 2003 is engaged only where the excessive SDLT was caused by a mistake in the claim or election itself. The existence of a claim and a mistake in the same return does not establish that causal connection.

For multiple dwellings relief, the claim is made by identifying the relief in the land transaction return. The subsequent calculation of SDLT, including the applicable rate, is a consequence of the claim and is not necessarily part of it. A mistaken rate calculation may therefore fall outside Case A, leaving overpayment relief available.

BTR acquired a property comprising dwellings and commercial premises and claimed multiple dwellings relief in its SDLT return. Following HMRC guidance then in force, it used the higher rates when calculating the SDLT due and consequently overpaid tax.

After the time for amending the return had expired, BTR claimed overpayment relief under paragraph 34 of Schedule 10 to the Finance Act 2003. HMRC refused the claim, relying on Case A in paragraph 34A, which excludes an overpayment caused by a mistake in a claim or election. The First-tier Tribunal dismissed BTR’s appeal on 1 October 2024. The issue before the Upper Tribunal was whether the mistaken rate calculation was a mistake in the MDR claim.

1. Appeal allowed. The First-tier Tribunal erred in law in concluding that Case A applied and precluded the claim for overpayment relief.

2. The phrase “by reason of a mistake in a claim” requires a causal inquiry. The court must identify the precise mistake which caused the overpayment and determine whether that mistake was in the claim, rather than merely occurring in a return containing a claim. The purpose of Case A is to protect the certainty and finality of the statutory requirements and time limits governing claims and elections.

3. The SDLT legislation distinguished the claim for MDR from the relief and the calculation of tax. Section 58D(2) of the Finance Act 2003 required the relief to be claimed in a land transaction return or its amendment. The claim was validly made by the entries identifying MDR in Question 9 of the return. The legislation imposed no requirement to quantify the relief as part of making that claim.

4. The incorrect use of the higher rates was instead a mistake in calculating the SDLT chargeable under paragraphs 4 and 5 of Schedule 6B. Paragraph 5(6A), which required account to be taken of Schedule 4ZA where the transaction was a higher rates transaction, governed the calculation of tax and did not impose an additional requirement for making the MDR claim.

5. The distinctions between liability and assessment machinery recognised in Whitney v IRC [1926] AC 37, and applied in R (oao Derry) v HMRC [2019] UKSC 19, informed the analysis but did not determine the statutory construction. Comparisons with other taxes and the explanatory notes were of limited or no assistance. The appeal was accordingly allowed.

• Upper Tribunal (Tax and Chancery Chamber): allowed BTR’s appeal and held that the FTT had erred in law.
• First-tier Tribunal (Tax Chamber): dismissed BTR’s appeal in its decision issued on 1 October 2024.