SDLT and property - a cautionary tale

Gill Orsman v Revenue & Customs

[2012] UKFTT 227 (TC) (28 March 2012)

In March 2010, Miss Orsman bought a house for £258,000 of which £8,000 was described as ‘chattels’. HMRC launched an enquiry and identified that some of the items described as ‘chattels’ were fixed items. The effect of this was that the SDLT charge rose from £2,500 to £7,524 - an increase of £5,024.

SDLT is charged at 1% on transactions not exceeding £250,000, but 3% on transactions between £250,000, not exceeding £500,000. HMRC therefore concluded that the applicable rate was 3% and sought to charge it on the full amount of the consideration.

Miss Orsman appealed to the First-Tier Tribunal. She had paid £250,000 for the house and land and £8,000 for the chattels, which comprised:
• Three double semi-fitted wardrobes;
• Down-lights flush eyeball lights;
• An electric over and hob in the kitchen; and
• An up-and-over door motor unit in the garage.

There were other items such as washing machines that were plainly chattels and were not disputed.

The Tribunal decided that another £800 should be consideration in respect of the land and not chattels. This, however, meant that the tax rate was increased from 1% to 3%, giving rise to a further £5,024.

The problem was that the consideration was not apportioned to the individual chattels, but was a global transaction. 

Access the full case details for more information.