Upper Tribunal Tax and Chancery Chamber

UT/2023/000083 - [2024] UKUT 00188 (TCC)

Fecha: 22-Abr-2024

FTT’s findings of fact

FTT’s findings of fact

19.

The FTT recorded Mr Suterwalla’s evidence at [34] – [38] of the Decision. Although it does not expressly say so in the Decision, which is regrettable, Mr Suterwalla’s evidence does not appear to have been challenged by HMRC and the FTT seems to have accepted it. The FTT made findings of fact in relation to the purchase of the Property and the grazing lease at [39], [48] and [55]. From those paragraphs, the material facts may be summarised as follows:

(1)

The Property consisted of two registered titles at the Land Registry: one for the dwelling house, gardens and tennis court; and a separate title for the paddock.

(2)

The sales brochure for the Property did not use the word “equestrian” or mention any stables or other suitable accommodation for housing horses. The only references to the paddock in the sales brochure appeared to be almost an afterthought. One paragraph was headed “Garden, grounds and paddock” but did not mention the paddock. Another paragraph was as follows:

“The lower garden has a Pavilion with covered veranda, and opposite is a fully enclosed hard surface tennis court. There is also a paddock.”

(3)

The paddock was separated from the tennis court by a hedge with only a small gate giving access to the paddock from the house and gardens. It was not possible to see the paddock from the house.

(4)

Mr Suterwalla (and, we infer, Mrs Suterwalla) had never used the paddock. Mr Suterwalla would not have purchased the paddock if it had been possible to buy the house and gardens without the paddock.

(5)

On the same day as they purchased the Property, Mr and Mrs Suterwalla granted a grazing lease of the paddock for one year to a neighbour, Ms Pragnell, for an annual rent of £1,000.

(6)

The grazing lease described the “Permitted Use” as “use for grazing up to 2 horses for [Ms Pragnell’s] private purpose only.” Under clause 3 of the grazing lease, Ms Pragnell had “the right to pass and repass over [Mr and Mrs Suterwalla’s] adjoining land (using a route designated by [Mr and Mrs Suterwalla] from time to time) with or without vehicles and horses to obtain access to and egress from the [paddock].”

(7)

Mr Suterwalla never designated a route as required by clause 3 of the grazing lease and Ms Pragnell never requested such a designation. Ms Pragnell never exercised her right to pass and repass over Mr and Mrs Suterwalla’s land to enter and leave the paddock because she had direct access to it over some common land from a bridle path. If Ms Pragnell had exercised her right under the lease, it would have meant her horses having to walk over Mr and Mrs Suterwalla’s lawns. It would not have been possible to access the paddock with vehicles as provided by clause 3.

(8)

Mr Suterwalla considered that the grazing lease was a commercial one as, although the rent of £1000 per annum was relatively modest, the grazing by Ms Pragnell’s horses meant that he did not have to worry about cutting the grass in the paddock.