Orsman v Revenue & Customs

Factual and Procedural Background

The Appellant purchased a house in March 2010 for a total consideration of £258,000, which included £8,000 attributed to chattels. Subsequently, the Respondents amended the stamp duty land tax (SDLT) payable on the transaction from £2,500 to £7,524 by treating certain items, specifically the built-in fitted units and worktop in the garage, as part of the land rather than chattels. This led to a closure notice issued on 28 February 2010, which the Appellant challenged by requesting an independent review. The review upheld the amendment, and although the Appellant’s appeal was lodged late, the tribunal allowed it to be heard. The appeal concerns the correct attribution of chargeable consideration between land and chattels for SDLT purposes.

Legal Issues Presented

1. Whether the purchase constituted a single transaction comprising both land and chattels.
2. Which items in the transaction should be classified as part of the land and which as chattels.
3. How the total consideration should be apportioned on a just and reasonable basis between land and chattels.
4. The extent of the tribunal’s jurisdiction in considering matters beyond those specified in the closure notice, particularly in light of the Supreme Court decision in HMRC v Tower MCashback.

Arguments of the Parties

The opinion does not contain a detailed account of the parties' legal arguments.

Table of Precedents Cited

Court's Reasoning and Analysis

The tribunal first established that the purchase was a single transaction encompassing both land and chattels. It then applied statutory provisions from the Finance Act 2003, particularly Schedule 4 paragraph 4, requiring apportionment of consideration on a just and reasonable basis between land and non-land elements.

To determine which items constituted land, the tribunal applied established legal criteria concerning annexation and purpose of annexation. Items firmly fixed to the property and intended as permanent improvements were classified as land, while moveable or less permanently affixed items were classified as chattels.

The tribunal found that the garage worktop and fitted units, although not fixed to walls, were sufficiently annexed and intended to improve the utility of the garage as part of the house, thus qualifying as land. Other items such as wardrobes and the electric oven and hob were ultimately classified as chattels after further evidence and correspondence.

Regarding apportionment, the tribunal recognized that the valuation of the house at £250,000 did not conclusively determine the apportionment of the £8,000 attributed to chattels. It emphasized that the apportionment must reflect what was actually paid and be just and reasonable, not necessarily aligned with market values.

The tribunal also carefully considered its jurisdiction in light of the closure notice and the precedent set by HMRC v Tower MCashback. It concluded that the appeal was limited to the specific point raised in the closure notice—whether the worktop and units were part of the land—and that expanding the appeal to other items would be unfair.

Holding and Implications

The tribunal dismissed the appeal.

The tribunal held that it was just and reasonable to attribute £250,800 of the total consideration to the land, including the garage worktop and units, thereby supporting the increased SDLT charge. The appeal was limited to the items specifically challenged in the closure notice, and no broader reclassification of other items was permitted. This decision directly affects the parties by affirming the amended SDLT liability but does not establish a new legal precedent beyond the application of existing principles and the confirmed scope of tribunal jurisdiction in closure notice appeals.