My thanks to a loyal reader who point this case out to me.
The First-tier Tax Tribunal (FTT) has voided a capital gains tax (CGT) assessment imposed on a English couple's sale of their home, whose garden HMRC considered to be larger than necessary for the property's 'reasonable enjoyment’.
The FTT judges decided to take into account not just comparable properties, but all of the relevant facts and evidence, including the size and value of the house and buildings themselves, and the nature of the property's location.
The facts that the Phillips' house was large and was set in a rural area suggested that it would appeal to somebody who was looking for a larger house and more space around it for privacy and other reasons.
'We accept that the whole of the area of 0.94 of a hectare comprising the garden and grounds of Mr and Mrs Phillips's property was required for the reasonable enjoyment of the dwelling-house and so falls within the permitted area qualifying for PPR relief', said the FTT judges. 'The assessments made by HMRC...in respect of both Mr and Mrs Phillips in the amount of GBP162,820 are therefore reduced to nil'
Tax does have to be taxing.
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