THE COMMISSIONERS FOR HIS MAJESTY’S REVENUE AND CUSTOMS v DANIEL RIDGWAY [2024] UKUT 00036 (TCC)
| Jurisdiction | UK Non-devolved |
| Judge | Judge Jonathan Cannan,Judge Vimal Tilakapala |
| Court | Upper Tribunal (Tax and Chancery Chamber) |
| Published date | 13 February 2024 |
Neutral Citation: [2024] UKUT 00036 (TCC) Case Number: UT/2022-000128
UPPER TRIBUNAL
(Tax and Chancery Chamber) Hearing Venue: The Rolls Building,
Fetter Lane, London EC4A 1NL
STAMP DUTY LAND TAX – mixed use property – section 116 Finance Act 2003 – suitable for
use as a dwelling – relevance of covenant in a lease not to use the premises for residential
purposes – relevance of planning law restrictions – whether the FTT failed to take into account
all relevant factors – enquiry into land transaction return – HMRC concluding that not mixed
use property – absence of any claim for multiple dwellings relief in the return or an amended
return – whether HMRC should have given the benefit of multiple dwellings relief when closing
the enquiry
Heard on: 06 November 2023
Judgment date: 09 February 2024
Before
Judge Jonathan Cannan
Judge Vimal Tilakapala
Between
THE COMMISSIONERS FOR HIS MAJESTY’S REVENUE AND CUSTOMS
Appellants
and
DANIEL RIDGWAY Respondent
Representation:
For the Appellants: Ross Birkbeck, instructed by the General Counsel and Solicitor to His
Majesty’s Revenue and Customs
For the Respondent: Michael Ripley, instructed directly by the Respondent
2
DECISION
INTRODUCTION
1. The appellants (“HMRC”) appeal against a decision of the First-tier Tribunal (Tax
Chamber) (“the FTT”) released on 29 April 2022 with neutral citation [2022] UKFTT 0412
(TC) (“the Decision”). The FTT held that the respondent (“Mr Ridgway”) was entitled to
multiple dwellings relief for the purposes of stamp duty land tax (“SDLT”) on his purchase of
property comprising land and buildings in Oxford (“the Property”).
2. The Property comprised two separate registered titles. The first was a semi-detached
house and gardens on Crick Road. The second was adjoining land and a building known as the
Old Summer House which also had a separate access via Norham Road. The Old Summer
House had originally been used as a garage and later as an artist’s studio.
3. Mr Ridgway purchased the Property from its joint owners on 23 August 2017 for £6.5m.
On advice from his solicitor, he had taken steps to reduce the SDLT payable on the purchase.
He was advised that if the Old Summer House was in commercial use at the date of completion
then “mixed use relief” could be claimed. In fact, this is not a relief as such but a lower rate of
SDLT on commercial and mixed use property. Mr Ridgway was also advised that if there was
no commercial use, then multiple dwellings relief could be claimed.
4. Two weeks prior to completion, at the instigation of Mr Ridgway, the vendors granted a
commercial lease of the Old Summer House for a term of 6 months to a photographic studio
business called Vine House Studios. The FTT incorrectly records this as a 9 month lease. Mr
Ridgway had identified Vine House Studios as a potential commercial user of the Old Summer
House. The lease contained a covenant that the Old Summer House should not be used for
residential purposes.
5. Mr Ridgway submitted a land transaction return on 1 September 2017 in which it was
stated that the Property was mixed use, part residential and part commercial. SDLT of £314,500
was paid at the lower non-residential rate. If SDLT had been paid at the residential rate it would
have amounted to £888,750. With the benefit of multiple dwellings relief, the SDLT would
have amounted to £577,500.
6. HMRC opened an enquiry into the land transaction return on 29 May 2018. A closure
notice was issued on 8 February 2021. The closure notice stated HMRC’s conclusion that the
Old Summer House was residential property as defined in section 116 Finance Act 2003 (“FA
2003”) because it was “suitable for use as a dwelling”. The land transaction return was
therefore amended to charge SDLT at the residential rate and without the benefit of multiple
dwellings relief.
7. Mr Ridgway appealed against the amendment to his land transaction return on the basis
that the Old Summer House was not residential property. In the alternative he said that if the
Old Summer House was residential property, then he ought to be entitled to multiple dwellings
relief pursuant to section 58D and Schedule 6B FA 2003.
8. The FTT held as follows:
(1) The Old Summer House was not residential property because it was not suitable
for use as a dwelling. In reaching that conclusion, the FTT took into account the physical
attributes of the building and the existence and terms of the commercial lease. In
particular the term which provided that it could not be used for residential purposes.
(2) However, section 75A FA 2003 was engaged. The FTT considered that this
required the actual land transaction and the grant of the lease to be disregarded in
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