Tax Tribunal Appeals for Stamp Duty

When to Appeal to the Tax Tribunal

If you disagree with HMRC's decision following a statutory review or if HMRC fails to complete a review within 45 days, you have the right to appeal to an independent tax tribunal. The tribunal system provides an impartial forum for resolving disputes without the cost and formality of court proceedings.

Common grounds for tribunal appeals include disputes over whether the higher rates for additional dwellings apply, disagreements about property valuations, multiple dwellings relief calculations, mixed-use property classifications, and challenges to discovery assessments issued outside normal time limits.

First-tier Tribunal (FTT) Process

The First-tier Tribunal (Tax Chamber) is the entry point for most stamp duty appeals. The process begins by completing and submitting form NOA1 (Notice of Appeal) to HM Courts & Tribunals Service, along with a copy of HMRC's review conclusion letter. There is no fee to lodge an appeal with the FTT.

FTT Hearing Tracks

• Basic cases: Disputes under £25,000 where issues are straightforward. Usually decided on paper without a hearing, though you can request one. Decision typically within 6 months.
• Standard cases: Most stamp duty appeals fall into this category. Involves a formal hearing before a tribunal judge, often with a specialist member. Parties exchange evidence and witness statements. Hearing typically lasts half to one day.
• Complex cases: High-value disputes or cases involving novel legal points. May be assigned to a specialist judge. Can take 12-18 months to reach a hearing.

Preparing Your Case

The tribunal operates on a more relaxed evidential basis than courts, but thorough preparation is essential. You'll need to gather supporting documentation including property transaction details, correspondence with HMRC, expert valuations if relevant, evidence of your intentions at the time of purchase, and comparative evidence for similar properties if challenging the additional dwelling surcharge.

The burden of proof lies with you as the appellant to show that HMRC's assessment is incorrect. The standard of proof is the balance of probabilities—more likely than not. Clear contemporaneous evidence of your circumstances and intentions at the time of purchase is particularly valuable.

Upper Tribunal and Court of Appeal

Upper Tribunal (UT)

If you disagree with the FTT's decision, you can appeal to the Upper Tribunal, but only on a point of law—not simply because you disagree with the factual findings. You must apply to the FTT for permission to appeal within 56 days of receiving the full written decision. If the FTT refuses permission, you can apply directly to the UT.

The UT hears appeals with a panel of senior judges and considers whether the FTT made an error of law in reaching its decision. The UT can uphold the FTT decision, set it aside and remake the decision, or remit the case back to the FTT for reconsideration. UT decisions create binding precedent for the FTT.

Court of Appeal

The final stage of appeal is to the Court of Appeal, again only on points of law and requiring permission. Court of Appeal decisions are binding on all lower tribunals and courts (except the Supreme Court). Very few stamp duty cases reach this level—typically only those involving significant legal principles or substantial sums.

Appeals to the Supreme Court are extremely rare and require certification that the case raises a point of law of general public importance. To date, no stamp duty case has been heard by the Supreme Court, though several inheritance tax and other property tax cases have established relevant principles.

Costs and Risk Assessment

One significant advantage of the FTT is that each party normally bears their own costs, regardless of who wins. This makes it less risky than court proceedings where the losing party typically pays the winner's costs. However, the tribunal can award costs if a party has acted unreasonably, vexatiously, or disruptively.

Cost Considerations

• Professional fees: Solicitor or tax adviser fees typically range from £5,000-£25,000 for FTT representation, depending on complexity.
• Expert witnesses: Property valuers or tax experts may charge £2,000-£10,000 for reports and attendance.
• Upper Tribunal: Barrister representation typically required, adding £10,000-£50,000 to costs.
• Court of Appeal: Senior counsel fees and preparation costs can exceed £100,000.

At the UT and Court of Appeal levels, costs orders are more common. If you lose, you may be ordered to pay HMRC's legal costs, which can be substantial. This makes the risk-reward calculation critical before pursuing higher appeals.

Preparing Your Tribunal Case

Essential Documentation

Strong documentation is the foundation of a successful tribunal appeal. Gather your evidence systematically:

• Transaction documents: Purchase contract, SDLT1 return, completion statement, mortgage documents
• HMRC correspondence: All letters, emails, and notices including the original assessment and review decision
• Property evidence: Estate agent particulars, survey reports, photographs, Land Registry documents
• Intent evidence: Contemporaneous documents showing your plans—emails, diary entries, correspondence with removal companies, utility connections, council tax changes
• Expert reports: Independent valuations if challenging HMRC's valuation, architectural reports for mixed-use disputes
• Comparative data: Evidence of how HMRC treated similar cases, details of comparable properties

Legal Representation

While you can represent yourself at the FTT, professional representation significantly improves your chances of success. Tax solicitors and specialist barristers understand tribunal procedures, can identify the strongest legal arguments, and know how to present evidence effectively. For disputes over £20,000, professional representation typically pays for itself.

Settlement Negotiations

Even after lodging a tribunal appeal, you can continue settlement discussions with HMRC. Many cases settle before the hearing once both parties have prepared their evidence and assessed the strengths and weaknesses of their positions. HMRC's Solicitor's Office handles tribunal litigation and may take a more pragmatic view than the compliance officer who issued the original assessment.

Recent Notable Tribunal Decisions

Understanding how tribunals have decided previous cases helps assess your prospects of success. Recent notable decisions include:

• Bewley v HMRC (2023): FTT allowed appeal against additional dwelling surcharge where taxpayer had owned the new property for 6 months before selling previous main residence. Tribunal accepted evidence that the delay was due to necessary repairs, not investment intent. Demonstrates importance of contemporaneous evidence of occupation intent.
• Fiander v HMRC (2022): UT upheld FTT decision that annex with shared access and facilities constituted a single dwelling despite having separate living spaces. Important precedent for multiple dwellings relief disputes and annex properties.
• Henshaw v HMRC (2024): FTT found in taxpayer's favour where HMRC argued property was bought as investment rather than replacement main residence. Tribunal accepted evidence including immediate mortgage application, furniture delivery dates, and utility contract changes showing occupation intent from completion.
• Parry v HMRC (2023): FTT rejected taxpayer's argument that property bought while temporarily living abroad qualified for main residence replacement relief. Tribunal held the taxpayer didn't have a previous main residence in UK to replace, demonstrating strict application of the replacement dwelling rules.

These cases illustrate that tribunals carefully examine the facts and require clear evidence of intent and circumstances at the time of purchase. Generic arguments without specific supporting evidence rarely succeed. The tribunal's assessment of witness credibility is also crucial—honest, consistent testimony that acknowledges difficulties in your case is more persuasive than overstated claims.