Markey v Sanders

Ch D 1987, 60 TC 245; [1987] STC 256; [1987] 1 WLR 864

The decision in this case is in contrast to the decision in Batey v Whitfield. The taxpayer owned a country estate comprising a house, several outbuildings and 12 acres of land. The taxpayer built a three-bedroom bungalow on the land, for occupation by domestic staff. The bungalow was separated from the main residence by a line of trees and was separate from the main residence for rating purposes. The taxpayer sold the whole of the estate and claimed that the main house and the bungalow constituted a single “dwelling-house” for the purposes of the principle private residence exemption. HMRC contended the properties could not constitute a single dwelling-house, as the bungalow was not closely adjacent to the main house.

It was held that it is necessary to look at the group of buildings as a whole and to ascertain whether they could be regarded as a single dwelling which was used by the taxpayer as their main residence and, on that basis, the bungalow could not be regard as part of the main residence for PPR purposes.