James George Gibson v The Commissioners for HMRC
[2023] UKFTT 648 (TC)
39 Fitzjohns Avenue Limited v The Commissioners for HMRC
4 January 2024
[2024] UKFTT 28 (TC)
First-tier Tribunal
A company bought a big house with a railway ventilation shaft in the garden and a workshop. They tried to get back some Stamp Duty claiming it wasn't just a house, but a mixed-use property. The judge decided the shaft and workshop didn't make the house mixed-use, and they couldn't get their money back.
Key Facts
- •39 Fitzjohn's Avenue Limited appealed HMRC's refusal of an SDLT overpayment relief claim.
- •The appeal concerned whether the property was 'mixed use' due to a railway ventilation shaft and a workshop.
- •The property was a substantial detached dwelling with extensive grounds.
- •A railway ventilation shaft and surrounding apparatus were located in the grounds.
- •A workshop in the house was allegedly occupied for a separate commercial purpose at the time of completion.
- •The property was purchased for £19,750,000, with a claimed overpayment of £1,899,250.
Legal Principles
Whether land forms part of a dwelling's garden or grounds is a multifactorial test considering various factors, with no single factor being determinative.
Hyman and others v HMRC [2021] UKUT 0068 (TCC); Hyman and Goodfellow v HMRC [2022] EWCA Civ 185
Section 116 of the Finance Act 2003 defines 'residential property', including buildings used or suitable for use as a dwelling and land forming part of its garden or grounds.
Finance Act 2003, section 116
Common ownership is a necessary but not sufficient condition for land to be considered part of a dwelling's grounds; contiguity is important.
Various cases cited, including Hyman, Thomas Kozlowski v HMRC [2023] UKFTT 711 (TC), James Faiers v HMRC [2023] UKFTT 00297 (TC) and The How Development 1 Limited v HMRC [2023] UKUT 84 (TCC)
A right of way does not prevent land from being considered grounds; some level of intrusion or alternative use is tolerated.
Faiers and Hyman
For a building to be considered 'mixed use', the commercial use must render it unsuitable for use as a dwelling, considering the degree of separation and conversion needed to reinstate the residential use.
HMRC guidance at SDLTM00390
Outcomes
The appeal was dismissed.
The ventilation shaft and its apparatus, along with the land it occupied, were considered part of the dwelling's grounds. The workshop was not proven to be subject to a commercial tenancy at the time of completion, and even if it were, it did not render the dwelling unsuitable for residential use.
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