Longson v Baker (Inspector of Taxes)
| Jurisdiction | England & Wales |
| Judgment Date | 16 November 2000 |
| Date | 16 November 2000 |
| Court | Chancery Division |
Chancery Division.
Evans-Lombe J.
Alun James (instructed by Wilsons, Salisbury) for the taxpayer.
Timothy Brennan (instructed by the Solicitor of Inland Revenue) for the Revenue.
The following cases were referred to in the judgment:
Green v IR Commrs TAXTAX[1982] BTC 378; (1982) 56 TC 10 (CS)
Newhill Compulsory Purchase Order 1937, Re, Payne's ApplicationUNK[1938] 2 All ER 163
Capital gains tax - Exemption - Private residence - Permitted area - House and stables in 7.56 hectares (18.6 acres) of land - Use for equestrian pursuits - Extent of "permitted area" of land for which taxpayer entitled to relief - Whether land required for reasonable enjoyment of dwelling house as residence having regard to its size and character - Question of fact - Taxation of Chargeable Gains Act 1992 section 222 subsec-or-para 3Taxation of Chargeable Gains Act 1992, s. 222(3).
This was an appeal by the taxpayer from the decision of a special commissioner ((2000) Sp C 238) dismissing the taxpayer's appeal against a capital gains tax assessment for the year 1995-96 on the disposal of his beneficial interest in his former matrimonial home.
The taxpayer was assessed to capital gains tax on the disposal of 18 acres of land including a dwelling house, stables and outbuildings. The Revenue took the view that the greater part of the land was not required for the reasonable enjoyment of the dwelling house as a residence within s. 222(3) of the 1992 Act. The commissioner decided that for the purposes of s. 222 of the Taxation Chargeable Gains Act 1992, the "permitted area" of land on which the taxpayer was entitled to relief under the private residence exemption was 1.054 hectares. The taxpayer appealed on the basis that the Revenue had agreed that the stables in which horses were kept were comprised in the term "dwelling house". In those circumstances the use of the land for equestrian pursuits should be taken into account when assessing whether the whole of the land was required for the reasonable enjoyment of the dwelling house as a residence. The Revenue argued, inter alia, that the issue of whether land was required for the reasonable enjoyment of a dwelling house as a residence was a question of fact within its discretion and not a matter for the court.
Held, dismissing the appeal:
1. The issue under s. 222(3) was a question of fact. The position was similar to that under s. 75 of the Housing Act 1936 which, in the context of compulsory purchase, referred to land as being "otherwise required for the amenity or convenience of any house". Those words had been held to involve a finding of fact and, by analogy, so did the words of s. 222(3). (Re Newhill Compulsory Purchase Order 1937, Payne's Application [1938] 2 All ER 163 considered.)
2. Use of land for equestrian pursuits was not relevant to the issue of whether that land was required for the reasonable enjoyment of the dwelling house as a residence. The test in s. 222(3) was an objective test. On that basis there was clearly no requirement to keep horses on the land in order reasonably to enjoy the dwelling house as a residence.
Evans-Lombe J: This appeal concerns the extent of the land being included with a house for the purpose of relief from capital gains tax on the disposal of a main residence underTaxation of Chargeable Gains Act 1992 section 222s. 222 of the Taxation...
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Ritchie; Ritchie
...Compulsory Purchase Order 1937, Payne's Application UNK[1938] 2 All ER 163, a decision of du Parcq J and Longson v Baker (HMIT) TAX[2001] BTC 356 a decision of Evans-Lombe J.[209] It is clear from these cases that “required” is to be equated with necessary, not just desirable. The question ......
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Henke v HM Revenue and Customs
...effected since the house had been built. He referred to Varty v LynesTAX51 TC 419 (also reported at [1976] STC 508) and Longson v BakerTAX[2001] BTC 356. The period of ownership 39. Mr Henke argued that the adjustment based on a time prior to completion of the dwelling-house was inconsisten......
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Whyte
...to determine the minimum amount for the permitted area. She said that in the light of the decision of the court in Longson v Baker (HMIT) [2001] BTC 356“minimum” was not a good word and “required or necessary” would have been better. She agreed that the test for permitted area was an object......
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Anthony John Henke and Alice Joyce Henke v Her Majesty's Revenue & Customs, SPC 00550
...been effected since the house had been built. He referred to Varty v Lynes 51 TC 419 (also reported at [1976] STC 508) and Longson v Baker [2001] STC 6. The period of Mr Henke argued that the adjustment based on a time prior to completion of the dwelling-house was inconsistent with the requ......