Goodfellow and Another
| Jurisdiction | UK Non-devolved |
| Judgment Date | 16 December 2019 |
| Neutral Citation | [2019] UKFTT 750 (TC) |
| Date | 16 December 2019 |
| Court | First Tier Tribunal (Tax Chamber) |
[2019] UKFTT 750 (TC)
Judge John Manuell, Mr Michael Bell ACA CTA
Having heard Mr Graham Callard (instructed by Cornerstone Tax) appeared for the appellant
Mr M McDougall-Moore appeared for the respondents
Stamp duty land tax (SDLT) – Claim for refund on grounds that property mixed-use and not residential – Meaning of residential property– FA 2003, s. 55, 116 – Appeal dismissed.
The First-Tier Tribunal (“FTT”) rejected a claim by the appellants subsequent to their purchase of a property that it was mixed-use rather than residential and hence dismissed their appeal against HMRC's refusal of their refund claim.
Nearly 18 months after they had purchased an extensive property and paid SDLT at Table A rates on the basis that the property was residential, the appellants lodged a claim under FA 2003, Sch. 10, para. 34 for a partial refund of tax on the grounds that the property was mixed-use and hence qualified for the lower Table B rates applicable to non-residential and mixed-use property.
They argued that the space above the garage was used as an office for the first appellant's business, that the stable yard and paddocks were used by a neighbour for grazing horses and that the paddocks were undeveloped land, all instances of non-residential use.
HMRC maintained that the office room was suitable for use as a dwelling and that the stable yard and the paddocks were part of the grounds, which were commensurate with the size of the dwelling-house.
The FTT agreed. The grounds as a whole were essential to the character of the property and provided a country setting in an area of outstanding natural beauty. There was no sign that anything approaching a commercial arrangement for their use had been made at any material time, and the rent paid by the neighbour was a nominal, peppercorn rent. The fact that the paddocks were not developed was irrelevant.
On the authority of Hyman [2019] TC 07271, none of the appellants' arguments had any substance. The whole of the property was residential within the meaning of FA 2003, s. 116, and the appeal would therefore be dismissed.
Given that the appellants' advocate and their advisers also acted for the unsuccessful appellants in Hyman, and the arguments were almost identical, one wonders why the appellants proceeded with the appeal at all.
[1] The Appellants appealed HMRC's decision made on 22 June 2018 to refuse the Appellants' claim for a Stamp Duty Land Tax (“SDLT”) refund of £48,500. Appellants are the registered proprietors of Heathermoor House, Hale Purlieu, Fordingbridge, Hampshire SP6 2NN (“the property”). The property was described in the land agent's particulars as a “fantastic family home set in about 4.5 acres within the sought after New Forest National Park” with six bedrooms, gardens, swimming pool, garaging, stable yard and paddocks. The Appellants completed the purchase on 21 March 2016. The consideration was £1,775,000, on which the Appellants paid SDLT of £126,750, having entered the property as residential on their SDLT1 return.
[2] Nearly one and half years later, on 30 October 2017, the Appellants' tax agents submitted a claim under paragraph 34 of Schedule 10 of the Finance Act 2003 (“FA03”) seeking relief of SDLT which it was said had been overpaid. It was asserted that the property had been misclassified as residential and should have been entered as mixed use. A claim was made of relief of SDLT overpaid of £48,500.
[3] An enquiry was opened by HMRC on 15 May 2018. Additional information was subsequently...
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