There have been numerous cases on what constitute residential or non-residential property for SDLT – which is hardly a surprise given the huge disparity in rates which apply to these two classes of property; that is to say 5% for non-residential and 12% or 15% or 17% for residential property.
Taxpayers have not had much success with their various arguments on mixed use by reason of pasture, rights of way, annexes etc., but they keep trying. And in the case of Mrs Anne-Marie Hurst, she was successful (A Hurst v HMRC [2024] UKFTT 540 (TC)).
Mrs Hurst purchased a property which everybody accepted was suitable as a dwelling and claimed that the property was a ‘hotel, inn or similar establishment’, and is therefore excluded from the definition of residential property.
The arguments advanced by Mrs Hurst were similar to the familiar arguments in connection with claims for 100% IHT business property relief – where the taxpayer has also been depressingly unsuccessful.
The tribunal examined at length all the evidence about the services provided, and concluded that:
‘The critical question is: was the scale of the activities associated with the provision of accommodation to paying guests enough to have reached the threshold necessary to represent commercial use with sufficient permanence and continuity to qualify as having used the property as an HISE [hotel, inn or similar establishment] and not simply as a dwelling?
‘On balance, and by the finest of margins, we have decided that it was.’
Mrs Hurst represented herself, and fine margins or not, she deserves to be very proud of herself. And would you believe it, in the same week there was another success for the taxpayer on the same subject (M Guerlain-Desai v HMRC [2024] UKFTT 117 (TC)).
Marie Guerlain-Desai purchased a dwelling house and claimed the nonresidential rate of SDLT on the grounds that the property was mixed use because it included 12 acres of woodland (which were used by the public) which were not part of the garden or grounds of the dwelling house. The FTT agreed that the woodland performed no function in relation to the dwelling and could not be said to form a part of the grounds of the dwelling within FA 2003 s 116(1)(b).
There have been numerous cases on what constitute residential or non-residential property for SDLT – which is hardly a surprise given the huge disparity in rates which apply to these two classes of property; that is to say 5% for non-residential and 12% or 15% or 17% for residential property.
Taxpayers have not had much success with their various arguments on mixed use by reason of pasture, rights of way, annexes etc., but they keep trying. And in the case of Mrs Anne-Marie Hurst, she was successful (A Hurst v HMRC [2024] UKFTT 540 (TC)).
Mrs Hurst purchased a property which everybody accepted was suitable as a dwelling and claimed that the property was a ‘hotel, inn or similar establishment’, and is therefore excluded from the definition of residential property.
The arguments advanced by Mrs Hurst were similar to the familiar arguments in connection with claims for 100% IHT business property relief – where the taxpayer has also been depressingly unsuccessful.
The tribunal examined at length all the evidence about the services provided, and concluded that:
‘The critical question is: was the scale of the activities associated with the provision of accommodation to paying guests enough to have reached the threshold necessary to represent commercial use with sufficient permanence and continuity to qualify as having used the property as an HISE [hotel, inn or similar establishment] and not simply as a dwelling?
‘On balance, and by the finest of margins, we have decided that it was.’
Mrs Hurst represented herself, and fine margins or not, she deserves to be very proud of herself. And would you believe it, in the same week there was another success for the taxpayer on the same subject (M Guerlain-Desai v HMRC [2024] UKFTT 117 (TC)).
Marie Guerlain-Desai purchased a dwelling house and claimed the nonresidential rate of SDLT on the grounds that the property was mixed use because it included 12 acres of woodland (which were used by the public) which were not part of the garden or grounds of the dwelling house. The FTT agreed that the woodland performed no function in relation to the dwelling and could not be said to form a part of the grounds of the dwelling within FA 2003 s 116(1)(b).
