Easement over communal garden was part of main transaction

The taxpayers bought a leasehold interest in a flat in London. It was in a building containing other flats with communal spaces inside and around the building. Access to these areas was by key fob available only to the owners of the flats and for which they had to pay a service charge. There were restrictions on the use of these areas although virtually none in relation to the communal garden.

The taxpayers paid stamp duty land tax on the basis the purchase was a residential dwelling. A year later they requested to amend their return saying the purchase included non-residential property in the form of the right to use the garden areas. HMRC refused the claim. The taxpayers appealed.

The central question for the First-tier Tribunal was whether the grant within the lease of a right to use a communal garden meant the acquisition was of mixed...