Interest in garages was residential

The taxpayer a property developer paid stamp duty land tax on the purchase of a property consisting of three garages and a flat on the basis that the property was mixed use (FA 2003 s 55 table B). The flat also had access to a communal garden.

The garages had been owned with the flat for many years. The taxpayer said they had been used for storage by a third party on an informal basis but there was little evidence of this.

HMRC said the whole property was residential; the garages were not separate. They formed part of the grounds and they had never been in commercial use. Any income derived from the garages had ceased several years before the effective date of transaction. Further from 2016 their intended use had become clear – they were to be demolished as part of a proposed conversion of the...