Newsand Limited v The Commissioners for HMRC
[2024] UKFTT 221 (TC)
Henderson Acquisitions Ltd v The Commissioners for HMRC
31 August 2023
[2023] UKFTT 739 (TC)
First-tier Tribunal
A company bought a house that needed a lot of fixing up – new wiring, heating, and some structural work. They tried to get back some of the tax they paid because the house wasn't livable right away. The court said the house was still basically a house, even if it needed work, so they didn't get their money back.
Key Facts
- •Henderson Acquisitions Ltd (Appellant) appealed HMRC's refusal to refund £12,350 in SDLT paid on a property purchased in 2016.
- •The Appellant's business is buying, renovating, and reselling houses.
- •The property was previously occupied but vacant at the time of purchase.
- •The property required significant renovations, including joist replacement due to a collapsed ceiling, full rewiring, and central heating system replacement.
- •The renovations did not require demolition of any part of the building.
- •The Appellant relied on the PN Bewley Ltd v HMRC case, arguing the extensive renovations rendered the property unsuitable for use as a dwelling.
- •HMRC argued that renovations without demolition don't automatically make a property unsuitable as a dwelling.
- •The Tribunal considered the Fiander and Bower v HMRC and Mudan v HMRC cases in their judgment.
Legal Principles
SDLT is charged based on whether land is residential or non-residential at the effective date of the transaction.
Finance Act 2003 (FA03), Section 55 and paragraph 4 Schedule 4ZA.
A building is considered residential if it is 'used or suitable for use as a single dwelling'.
Paragraph 18(2) Schedule 4ZA FA03, Section 116(1) FA03
'Suitable for use' does not mean 'ready for immediate occupation'. The level of disrepair must be significant enough to render it unsuitable for habitation, not merely requiring repairs or renovations.
Fiander and Bower v HMRC [2021] UKUT 156 (TCC); Mudan v HMRC [2023] UKFTT 317 (TC)
Outcomes
Appeal dismissed.
The Tribunal found that the property, while requiring substantial renovations, was structurally sound and possessed all necessary facilities for living. The required works were not so fundamental as to render it unsuitable for use as a dwelling, particularly as the property was previously used as a dwelling.