This was an unsuccessful application by HMRC to strike-out the appellant company’s appeal to the FTT over whether its purchase of a commercial building in Peterborough for £6.7m with consent for flats and where work had started on the day of completion, qualified for multiple dwellings relief (“MDR”). HMRC argued that the UT decision in Ladson Preston and AKA Developments meant that the appeal had no realistic prospect of success and so should be struck out.
The appeal had been made on the basis that work had started on the day of completion to adapt the existing building into a mix of residential units and commercial space so that the dwellings concerned were in the process of being adapted as such and so counted as dwellings for MDR under para 7(2)(b) Sch 6B FA 2003. Patrick Cannon represented the appellant company and successfully argued that the UT decision in Ladson Preston and AKA Developments Ltd focussed on the process of “construction” rather than the process of “adaptation” so that on the facts of this appeal, there was a physical building in existence at the effective date that was undergoing the physical process of adaptation (unlike in Ladson) and the UT had left it to individual FTTs to decide on the facts of each case what amounted to the physical commencement of works of construction or adaptation.
On this basis the FTT decided that HMRC had not shown that the appellant would not succeed in this appeal so that HMRC’s application to strike it out must be refused.
You can read the full decision here.
