A tax tribunal victory for HMRC also prevented it from “broadening its attack” on property fixtures during a dispute over stamp duty land tax (SDLT).
In Orsman v HMRC ( UKFTT 227 (TC), published in March), Gill Orsman had bought a house in 2010 for £250,000, and paid another £8,000 for the chattels left by the seller.
The chattels included £800 for “built-in fitted units with worktop” in the garage. The units were not fixed to the walls of the garage, but were attached to the worktop, which was itself fixed on battens mounted on the wall.
HMRC argued that these formed part of the land, and in the closure notice stated that the relevant consideration for the property was £250,800 , so SDLT of £7,524 was therefore due (3% x £250,800), rather than £2,500 (1% x £250,000).
The first-tier tribunal concluded that the apportionment of £8,000 between the various items carried out by the purchaser was not “wholly unreasonable” and said that £250,800 should be apportioned to land and fixtures, rather than £250,000. But the tribunal also said that it would apply the principle in the Tower MCashback case to stop a “broadening of the attack” by HMRC over SDLT by referring to items other than the worktop and units.
Ian Matson wrote in a Gabelle tax analysis that the tribunal’s decision showed the “capricious workings of an SDLT ‘cliff edge’ regime and HMRC’s tenacity”.