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BRANDBROS LIMITED V HMRC [2021]

This decision addresses the effect for SDLT purposes of the grant of a commercial lease over the garage of a residential property by the purchaser on the day of completion and whether that had the effect of causing the property purchased to be treated as mixed-use.

The FTT held in favour of HMRC and decided that the grant of the lease was a separate transaction and did not affect the treatment of the prior purchase of the dwelling earlier in the day as residential despite the reference in section 119 FA 2003 to the date and not the time of completion.

The FTT also said obiter that the grant of the lease (as distinct from the actual use which occurred later) did not alter the use of the garage for SDLT purposes.

This decision leaves open the question of what type of commercial use occurring in the grounds of a residential property will be sufficient to cause the property purchased to be considered mixed-use. Patrick Cannon pressed the Upper Tribunal during the Hyman appeal to answer this question but the judges did not respond to this invitation and so the matter remains to be decided.

Read the full decision here.

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