Danielle Katie Sexton & Anor. v The Commissioners for HMRC
Decision date: 19 January 2023
Neutral citation: [2023] UKFTT 73 (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 taxpayers bought a leasehold flat whose lease included a gated, chargeable right to use a communal garden. The tribunal held that that right was an easement appurtenant to the flat and thus formed part of the "main subject‑matter" of the SDLT transaction and, in any event, fell within s116(1)(c) as a right subsisting for the benefit of the building, so the transaction was entirely residential. HMRC’s closure notice refusing the claimed SDLT refund 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: high
A right created by a lease that passes with the leasehold interest and confers a benefit on the dwelling is properly characterised as an appurtenant easement and may be treated as subsumed into the "main subject‑matter" of the land transaction for SDLT purposes (s43(6)). Further, an interest or right over land that subsists for the benefit of a building falls within s116(1)(c) and is to be treated as residential property for SDLT classification.
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 observed that communal garden land that does not adjoin or form part of a flat is unlikely to be "garden or grounds of" the flat under s116(1)(b), and drew a distinction between personal licences (which may not be appurtenant) and easements (which run with the dominant tenement); it noted that the decision in Nael Khatoun was limited by the finding there that the right was a licence.