Higher rate relief for holiday letting business

The taxpayer Waterside Escapes Ltd ran a holiday property letting business. It acquired a property from a limited liability partnership whose members were a married couple each holding a 50% interest. The wife also held 50% of the shares in the taxpayer. The other 50% were held by a trust which acquired its shares in the taxpayer on the same day as it acquired the property. 

The taxpayer filed a stamp duty land tax return on the basis that it had acquired the property exclusively for the purposes of its holiday letting business and the 15% rate of stamp duty land tax did not apply (FA 2003 Sch 4A para 5(1)). 

After an enquiry HMRC concluded that relief from the 15% rate was not available because a non-qualifying individual (the wife) was permitted to occupy the property for up to five days a year (Sch 4A para...