UT finds that calculation error was not a “mistake in a claim” and allows SDLT overpayment relief appeal

In BTR Core Fund JPUT v HMRC [2026] UKUT 27 (TCC), the Upper Tribunal (UT) allowed the taxpayer's appeal, finding that an error in calculating Multiple Dwellings Relief (MDR), for stamp duty land tax (SDLT), was not “by reason of a mistake in a claim”.

Background

BTR Core Fund JPUT (BTR) acquired the leasehold interest in a property in Manchester known as West Tower, for approximately £98 million. The property comprised around 350 residential dwellings, together with unlet commercial premises.

BTR filed with HMRC a SDLT return claiming MDR. In calculating the SDLT due, BTR applied the higher rates for additional dwellings, in line with HMRC’s guidance at the time. This resulted in BTR paying approximately £4.7 million of SDLT.

HMRC later revised its guidance and accepted that the acquisition was not a higher-rates transaction. As a result, BTR had overpaid SDLT by approximately £3.06 million.
Because the time limit for amending the SDLT return had expired, BTR submitted a claim for overpayment relief under paragraph 34, Schedule 10, Finance Act 2003 (FA 2003). HMRC initially gave effect to the claim and repaid the SDLT with interest. 

However, HMRC subsequently opened a compliance check and issued a closure notice concluding that it was not liable to give effect to the claim because the overpayment arose “by reason of a mistake in a claim”, which is an exclusion within paragraph 34A(2), Schedule 10, FA 2003.

BTR appealed to the First-tier Tribunal (FTT), which dismissed its appeal. BTR then appealed to the UT.

UT decision

The appeal was allowed.

Mistake in a claim

The key issue before the UT was whether the excessive SDLT arose “by reason of a mistake in a claim”, within the meaning of paragraph 34A(2), Schedule 10, FA 2003.

The UT held that BTR had correctly made a claim for MDR in its SDLT return. The mistake occurred in the calculation of the SDLT liability, when BTR applied the higher residential rates based on HMRC’s guidance at the time.

The UT emphasised that there was no statutory requirement to quantify the relief or provide calculations as part of the claim itself.

The error was not "a mistake in a claim", but rather, a mistake in the self-assessment of the SDLT due.

Purposive approach

In reaching its decision, the UT applied a purposive approach when construing the relevant statutory language, concluding that the purpose of the “mistake in a claim” exclusion is to prevent taxpayers from circumventing statutory time limits and procedural requirements for making a claim. Where a mistake consists of a failure to make a claim, for whatever reason, relief is not available.

That concern did not arise in the present case because BTR had validly claimed MDR within the SDLT return itself. The overpayment resulted from a computational error in applying the tax rates, rather than any defect in the claim itself. Accordingly, the exclusion did not apply and HMRC was required to give effect to the claim.

Comment

As MDR has been abolished, the significance of this decision is limited to those who have already claimed MDR and miscalculated their liability and are still in time to make an overpayment relief claim.

It is interesting to note that the FTT member, Julian Sims, issued a rare dissenting decision in this case (Judge Gauke had the casting vote) in which he agreed with BTR that the relevant mistake was in the calculation of liability to tax rather than the claim itself, and the UT ultimately agreed with him. 

The decision can be viewed here.