The FTT has held that relevant property acquired by the taxpayer was not, for SDLT purposes, a replacement for the taxpayer’s only or main residence (Cohen v HMRC [2023] UKFTT 90 (TC)).
The tribunal also ruled that the HMRC enquiry had been opened within the proper time limits, i.e. within nine months of the filing date, despite a complication caused by a change of address.
The main issue turned on whether a property in Sherrard Road was the taxpayer’s only or main residence, even though he had only lived there for 10 days. In finding for HMRC, the FTT gave the following reasoning:
“First, whilst we accept that Mr Cohen was in occupation of Sherrard Road (albeit only for ten days) this is not the same as saying it was his only or main residence. The features relied upon by Mr David Cohen are consistent with occupation but do not lead to the conclusion that Sherrard Road was Mr Cohen’s only or main residence. We note that Mr David Cohen (as had Mr Cohen in correspondence with HMRC) emphasised Mr Cohen’s intentions when he purchased Sherrard Road that it would be his only or main residence. However, we find that those intentions had changed before he moved in, as he had already decided to sell Sherrard Road and to purchase Luna Court during the works to Sherrard Road (and so before he moved in).
Secondly, the very short period of time that Mr Cohen lived at Sherrard Road is, in all the circumstances, indicative that his occupation was temporary.
Thirdly, Mr Cohen did not intend to live at Sherrard Road permanently. Before he moved into Sherrard Road he knew that such occupation would be temporary and very short term as he had already decided that his purchase of Sherrard Road was a mistake, had already decided to sell Sherrard Road, and had already decided to purchase Luna Court.
Fourthly, Mr Cohen did not even continue to live at Sherrard Road for the entirety of the period between completion of the works and the completion of the purchase of Luna Court; Mr Cohen said he only lived at Sherrard Road for ten days from 29 August 2018, whereas the purchase of Luna Court was completed on 30 October 2018.”
https://www.bailii.org/uk/cases/UKFTT/TC/2023/TC08718.html
Related content from Claritax Books
Stamp Duty Land Tax is a well-written, user-friendly guide to the complexities of SDLT, written for accountants, solicitors and other tax professionals, with plenty of worked examples. Topics covered include basic principles, leasehold transactions, partnerships, trusts, reliefs, anti-avoidance legislation and recent tribunal decisions. Full reference is made throughout to relevant legislation, case law and guidance from HMRC.
