29 November 2022

Ladson Preston Limited (1) AKA Developments (2) -v- HMRC

The appellants claimed multiple dwelling relief on the basis that planning permission had been granted to build dwellings on the land at the time of the transaction. In relation to the second appellant, certain preparatory works had also commenced prior to completion and site clearance commenced following completion. The appellants argued that these events meant that the interests acquired consisted of dwellings, in particular because there was “a building or part of a building…in the process of being constructed or adapted” for use as a dwelling (within the meaning of paragraph 7(2)(b) Schedule 6B FA 2003). The Upper Tribunal has dismissed the appeals holding that, in order for there to be a building in the process of being constructed for use as a dwelling, there must be some physical manifestation (but it is a question of fact and degree as to what precise physical manifestation will meet the statutory test). In addition, the Upper Tribunal confirmed that (on the facts of the second appeal) the statutory test must be applied to the chargeable interest as it stood at the time of competition, and therefore events after completion were irrelevant.

Ben Elliott acted for HMRC.

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