"But the owners argued that they should receive a large tax refund, saying the property is mixed use' due to the storage unit which measures less than two by four metres - tax rules stipulate that higher residential rates of stamp duty should only be applied if the entire property is deemed to be residential. A first-tier tribunal found in the couple's favour, and the property has now been classed as mixed use by HMRC and taxed at a lower rate."
"The storage unit and the apartment being located on different floors of the building were integral to the decision. Such tax disputes over mixed-use or residential properties are more typical in the case of farms, where agricultural buildings are included in a sale. Observing that the decision involved a strained interpretation of the legislation, the tribunal nevertheless concluded the law was clear that stamp duty should not be applied."
A Grosvenor Square flat sold for £18.25m in 2022 included a basement storage unit measuring under two by four metres. The buyers argued the property should be classed as mixed-use because the storage unit formed non‑residential land, meaning residential stamp duty rates should not apply to the entire purchase. A first‑tier tribunal agreed, noting the storage unit and apartment being on different floors was integral to the decision. HMRC reclassified the property and applied a lower tax rate, producing a £1.7m saving. The tribunal described the outcome as surprising but said the legislation was clear. An accountant noted the rules can create counter‑intuitive results and may prompt reform.
Read at www.standard.co.uk
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