Property acquired speculatively for redevelopment

The taxpayer’s main activity was the redevelopment of land and property. In 2016 it bought a property with a view to redevelop the site for two or four new houses. The director applied for planning permission and while that was underway moved into the property with his partner because they need accommodation in a short-term emergency. Eventually permission was refused so the director acquired the property from the company to develop a single dwelling to occupy himself.

On acquisition of the building the taxpayer claimed relief from higher rate stamp duty land tax on the basis the property would not be used personally. HMRC later withdrew relief because the taxpayer no longer met the conditions for it to apply and imposed a penalty for a deliberate inaccuracy in the return.

The taxpayer appealed. The director said when the return was submitted it was correct; he had no...