Oakwood Great Oak Ltd v The Commissioners for HMRC

Facts

The appellant, Oakwood Great Oak Ltd, a property developer, purchased "Great Oak", Prowse Avenue, Bushey Heath, on 29 November 2022 for £2,400,000. The property was a substantial detached house built in the 1930s, comprising a basement, two principal storeys and a timber roof structure, with a two-storey extension added in the 1960s. It had been vacant for approximately three to four years and had deteriorated markedly: damp, mould, water ingress, cracking, defective services and asbestos-containing materials in numerous locations. The appellant had from the outset regarded the site as a development opportunity and intended to demolish the house and build two new dwellings. On 13 December 2022 it filed an SDLT return treating the transaction as non-residential. HMRC opened an enquiry on 7 September 2023 and issued a closure notice dated 22 December 2023 concluding that the property was residential property within section 116(1)(a) of the Finance Act 2003. That conclusion was upheld on review by letter dated 2 May 2024, and the appellant appealed to the First-tier Tribunal on 30 May 2024. The tribunal heard evidence from Mr Levy, a director, and Mr Scoffield, an asbestos consultant, together with competing structural reports and a costings report estimating remedial works at some £2.25 million.