Landmaster Investment Limited & Anor v The Commissioners for HMRC
Decision date: 3 August 2023
Neutral citation: [2023] UKFTT 736 (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
The appellants paid small reservation fees for specific apartments and later acquired 999‑year leases; they argued the reservation agreements were options or rights of pre‑emption so the leases should not be charged at the residential SDLT rate. The Tribunal refused late further submissions, found the reservation agreements were only personal lock‑out/exclusivity obligations (not options or pre‑emptive rights) and dismissed both appeals, confirming HMRC's residential SDLT treatment. The Tribunal added that even if the agreements had been options or rights of pre‑emption, the relevant land would have been the specific apartments (residential) so SDLT at the residential rate would still apply.
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
A contractual reservation that merely prevents the seller from negotiating with others (a lock‑out/exclusivity) and does not confer a unilateral power to create a binding sale is not an option or right of pre‑emption for the purposes of s 46 Finance Act 2003; and where an option/right relates to a specific apartment, the "relevant land" for SDLT purposes is that apartment so residential rates apply to linked acquisitions.
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 expressed concerns about potential SDLT avoidance via reservation agreements but did not decide the case on anti‑avoidance grounds; it also noted without deciding that options/rights may need to comply with formalities under the Law of Property (Miscellaneous Provisions) Act 1989 to fall within s 46, and that the effective date of acquiring an option/right is the date of acquisition, which may relate to a building to be constructed.