Purchase of property and grant of lease are separate transactions

The taxpayer claimed that the property it had bought had been wrongly classified as residential when part of it namely its garage was non-residential so that the mixed-use rate of stamp duty land tax was due. It said that the grant of a lease of the garage of the property for commercial purposes on the date of completion meant that the garage should be treated as non-residential. In essence if the property became mixed-use during the day of completion and remained in that condition it should be regarded as of mixed use.

HMRC disagreed and the taxpayer appealed.

The First-tier Tribunal was satisfied that the garage should be treated as a building or structure in the grounds or garden of the property. So as a matter of statutory interpretation it was treated as residential property regardless of the use to which it was put.

Further ...