Andrew Nunn v The Commissioners for HMRC
Decision date: 27 March 2024
Neutral citation: [2024] UKFTT 298 (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 principal private residence (PPR) relief applied to part of Mr Nunn's garden sold to a developer and, relatedly, whether a 2 June 2016 letter effected an earlier disposal, constructive trust, or appropriation to trading stock. The Tribunal held that the relevant disposal date is determined by the TCGA (including s.28), that the 2 June letter was neither a contract nor a constructive trust, and although there was a deemed appropriation to trading stock on 2 June 2016 the land remained garden/grounds on that date. As a result PPR relief applied to the deemed disposal and the suspended penalty was set aside.
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 the TCGA uses the term "disposal" for PPR purposes the timing is governed by the TCGA statutory rules (including s.28) rather than by general contract law; and an arrangement allowing a professional developer to commence substantial development can amount to appropriation of land to trading stock (triggering a deemed disposal) even if the landowner did not carry out physical works, depending on the substance of the transaction.
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 noted (obiter) that clear documentation of developer/landowner arrangements reduces uncertainty about whether trading treatment arises, and outlined three practical scenarios for garden/grounds cases where the timing and nature of developer steps will often determine PPR availability (retention as garden until sale; appropriation at commencement of development; intermediate situations).