Marcus and Marcus Limited v The Commissioners for HMRC
Decision date: 3 May 2022
Neutral citation: [2022] UKFTT 145 (TC)
Overall AI summary confidence: high
Short overview
This short overview is intended to summarise the case, issues and outcome so far as they are supported by the judgment.
AI confidence in this short overview: high
This appeal concerned whether Clay Hill Lodge comprised multiple dwellings for Multiple Dwellings Relief under Schedule 6B FA 2003 and how the £875,000 purchase price should be apportioned on a "just and reasonable" basis. The Tribunal held the Main House and Summerhouse formed one dwelling and the Office formed part of the Annexe dwellings, and that it was just and reasonable to apportion consideration by reference to floor area (equal value per sqm). Applying the agreed floor-area apportionment using the District Valuer’s measurements attributed £443,713 to the Main House (below the £500,000 threshold), so MDR applied and the appeal was allowed.
Ratio decidendi
This summary is intended to identify the ratio decidendi, meaning the legal reasons for deciding and the binding part of the decision.
AI confidence in this ratio decidendi summary: high
Where Schedule 6B requires identification of separate dwellings, the proper inquiry includes which buildings and land were occupied or enjoyed with each dwelling at the time of purchase (not merely proximity on a plan). A "just and reasonable" apportionment of the purchase consideration can, where the facts and parties’ intentions support it, legitimately be made by agreement using a floor-area basis allocating equal value per square metre and apportioning grounds pro rata.
Obiter dicta
This summary is intended to identify obiter dicta, meaning observations made by the way that were not necessary to deciding the case and are not binding.
AI confidence in this obiter dicta summary: medium
The Tribunal indicated that market value is not the only permissible basis for a just and reasonable apportionment; broader factors such as intended use and the parties’ views can be relevant, and one should be cautious about importing apportionment approaches from other tax contexts because principles are context-sensitive.