Thomas Kozlowski v The Commissioners for HMRC
Decision date: 8 August 2023
Neutral citation: [2023] UKFTT 711 (TC)
Overall AI summary confidence: medium
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: medium
This appeal concerned whether a detached garage sold with a dwelling was residential for SDLT when the buyer let it the same day under a short tenancy at will to a connected company. The Tribunal held the nature of the chargeable interest is assessed at the moment of completion, and on that basis the acquired interest was wholly residential because the garage formed part of the garden/grounds; the tenancy at will was not a genuine commercial lease and s.116(1)(c) did not apply. HMRC’s closure notice demanding additional SDLT was upheld and the appeal dismissed.
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: medium
The binding ratio is that for SDLT the character of the chargeable interest is determined at the actual time of completion (not by later events on the same "effective date"), and land or buildings that form part of the garden or grounds of a dwelling are residential for s.116(1)(b) even where a subsequent short, non‑genuine commercial arrangement is entered into.
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 decision records as persuasive (non‑binding) guidance that the multi‑factorial test (historic/future use, layout, proximity, extent, legal constraints, connection to the dwelling) is the proper approach to decide whether land forms part of garden/grounds, and comments that s.116(1)(c) is principally directed at rights over third‑party land rather than parts of the subject property itself.