Benjamin Cohen v The Commissioners for HMRC
[2023] UKFTT 90 (TC)
Lorraine Hayes v The Welsh Revenue Authority
8 March 2023
[2023] UKFTT 280 (TC)
First-tier Tribunal
Mom helped daughter buy a house, and ended up owing extra taxes because of the way they bought it. The court said the tax rules were clear, and they couldn't change the rules even if it seemed unfair.
Key Facts
- •Property in Trowbridge purchased for £136,000 on 28 May 2021.
- •Buyers: Mrs Lorraine Hayes (Appellant) and her daughter, Ms Olivia Hayes.
- •Property intended as Ms Olivia Hayes's home; Mrs Hayes lives elsewhere.
- •Mrs Hayes is a borrower on the mortgage.
- •Initial Land Transaction Return (TR1) indicated higher rates of Land Transaction Tax (LTT), with £5,440 paid.
- •Amended return stated it was a normal residential transaction (LTT £0).
- •Welsh Revenue Authority (WRA) issued a closure notice reverting to the higher rates.
- •Mrs Hayes appealed the closure notice.
Legal Principles
LTT replaced Stamp Duty Land Tax in Wales from 1 April 2018.
Land Transaction Tax and Anti-avoidance of Devolved Taxes (Wales) Act 2017 (LTTA 2017)
A transaction is a higher rates residential property transaction if certain conditions in Schedule 5 of LTTA 2017 are met.
LTTA 2017, Schedule 5
Joint buyers are subject to higher rates if the conditions apply to any one of them.
LTTA 2017, Schedule 5, Paragraph 6
Appealable decisions include decisions affecting chargeability to or amount of devolved tax.
Tax Collection and Management (Wales) Act 2018 (TCMWA 2018)
The Tribunal can affirm, vary, or cancel the WRA's decision.
TCMWA 2018
Outcomes
Appeal dismissed.
The transaction met the criteria for higher rates residential property transaction under LTTA 2017, Schedule 5. The Tribunal lacked the power to consider fairness or policy arguments.