Dodgy looking SDLT mixed-use judgment

https://caselaw.nationalarchives.gov.uk/ukftt/tc/2024/515

Didn't find your answer?

Obviously well done to the taxpayer's barrister here, but this looks like a poorly reasoned decision amenable to appeal. If this decision were right, then the corollary would seem to be that pretty much any big house with large "grounds" that the public are free (in practice if not by right) to roam around on is mixed-use property, which does not sound right (to me at least). For example, is Osborne House on IoW mixed-use just because that's got loads of adjacent woodland that the public can roam around on? 

https://caselaw.nationalarchives.gov.uk/ukftt/tc/2024/515

As there is no de minmis threshold for any non-residential element, if you had people like this taking a non-permitted shortcut across a tiny corner of your large estate (that was otherwise residential), would that alone make it mixed-use?

CCTV shows noisy night-time Yr Wyddfa walkers in Llanberis - BBC News , https://www.bbc.co.uk/news/videos/c722gp100p3o

See also amusing history here: https://www.rossmartin.co.uk/sme-tax-news/6941-late-appeal-allowed-tax-a...https://www.patrickcannon.net/notable-cases/marie-guerlain-desai-v-hmrc/https://www.rsmuk.com/insights/weekly-tax-brief/taxpayers-cant-have-thei...

Replies (11)

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By Ruddles
24th Jun 2024 11:25

As you should well know, Justin, SDLT cases like this are very fact-dependent and do not set any precedent (even ignoring the point that this was a FTT decision). Dangerous, therefore, to try and apply it to other scenarios.

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VAT
By Jason Croke
24th Jun 2024 12:49

I think it is always foolish, when trying to argue that a forest is part of the grounds of the property, to not to have actually visited or seen the property in order to support your argument. There is a thing called Google Maps for example.

I can see loads of cases now focusing on public rights of way, although as Ruddles has already posted, probably a unique to case specific situation, although I am sure that this taxpayers specific situation is not entirely unique.

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Replying to Jason Croke:
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By Justin Bryant
24th Jun 2024 12:53

But it is legitimate to consider the corollary per my OP to see if such an argument/reasoning is a non sequitur etc. in principle in the first place (as seems to be the case for the above reasons).

If more judges considered the corollary of their judgments there would be far less dodgy judgments. The Mehjoo first-instance decision is a good example of such flawed reasoning (a simple non sequitur) that overlooks the corollary of the decision.

I believe that HMRC will successfully appeal this. If not, all bets are off re my above de minims point. (Hopefully you are writing one of your insightful (if not inciteful) SDLT articles on this!)

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By Bobbo
24th Jun 2024 14:28

I haven't read the decision in detail (who has time for that :) ) but found my opinion swaying as I read what of it that I did.

As it happens I have walked in Durford Wood - wonder if I walked on this taxpayer's land!

Would a better system for SDLT on mixed use property be to apportion the consideration between residential and non-residential elements? (Though I suppsoe these cases would just become the taxpayer and HMRC disagreeing on such apportionment.)

As regards Osborne on the IoW - given it has restaurants/cafes and its use as a museum, I daresay it would count as at least mixed use!

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Replying to Bobbo:
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By Justin Bryant
24th Jun 2024 14:32

That's a good point re OH* (I was there at the recent bank holiday weekend admiring all the many exotic trees that Prince Albert planted -which is why I mentioned it), but I'm sure you know what I mean.

* but where do you draw the line e.g. I've seen small houses operate as museums (that are otherwise suitable for use as a dwelling) and what if it's only open once a year and offers cream teas etc.?

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Replying to Justin Bryant:
By Ruddles
24th Jun 2024 14:53

Justin Bryant wrote:
but where do you draw the line

I wouldn't draw the line anywhere. That is for the courts to decide, based on the individual merits of each case.

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Replying to Justin Bryant:
Stepurhan
By stepurhan
24th Jun 2024 16:11

Justin Bryant wrote:
I've seen small houses operate as museums (that are otherwise suitable for use as a dwelling) and what if it's only open once a year and offers cream teas etc.?


That would need to be decided on the facts, but are you aware of any museum that only open once a year and offers cream teas? The closest analogy I can think of is those events in villages where various householders give access to their gardens and sometimes serve light refreshments. I would be surprised if any court considered that created mixed use.

On a similar front, I'm not sure where you're getting the people crossing a remote corner of an estate in a not-permitted fashion being an issue from. If any such action was technically trespassing (i.e. not authorised or allowed by the owner) then I cannot see that mixed use could be forced on a property owner solely by the actions of others. This is in contrast to the woods in the case above, where public access was established by both custom and, more importantly, the actions of the owner.

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By Adman W
24th Jun 2024 16:43

I wonder if anyone else whilst googling to see the property in question found the fighter jet on a neighbours front lawn!
google.co.uk/maps
51.024114706921225, -0.8936732949752059

would this qualify as mixed use as an airfield?!

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Replying to Adman W:
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By FactChecker
24th Jun 2024 18:58

Well spotted ... I always wondered what the purpose was for such satellite views - but now I know!

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Replying to FactChecker:
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By FactChecker
25th Jun 2024 13:49

Actually seems remarkably good value:
"Durford Edge is a magnificent Arts and Crafts family home set in secluded grounds in excess of 10 acres with over 8,400 sq ft of well proportioned accommodation and the most wonderful southerly views"
... yours for £3,950,000 (but not clear if the RAF Harrier II jet is included)!

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Replying to Adman W:
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By Justin Bryant
25th Jun 2024 09:33

Maybe if you winged it a bit that argument might fly.

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