Building as a whole was residential

The taxpayer bought a property the Bacon Factory in June 2016. It had originally been used to smoke bacon but in 1985 the two upper floors were converted to residential accommodation and the ground floor was designated as light industrial. The previous owner had undertaken a complete renovation of the property in 2017 and 2018 – broadly refurbishing the residential floors and altering the ground floor workspace part of which he and his partner used for their home accessories business. The marketing material described the area as ‘flexible’ with a garage area private bar and games room and also a large gym with sauna and spa.

The taxpayer submitted his stamp duty land tax return on the basis that the mixed rate applied. HMRC disagreed saying the whole property was residential. The taxpayer appealed.

The First-tier Tribunal noted that the ground floor consisted...