This is now the leading case on the approach of the tax tribunal to apportioning the purchase price to different buildings on a “just and reasonable” basis for SDLT purposes.
Patrick Cannon represented the taxpayer company and defeated HMRC’s attempt to apportion the price paid for a property consisting of three dwellings used to care for adults with autism and learning difficulties in such a way as to treat the main dwelling as worth more than £500,000 in order to charge the 15% higher rate of SDLT. In the event, the tax tribunal agreed with Mr Cannon that not only did the 15% rate not apply but that there were three dwellings at the property so the relief for MDR resulted in a significant tax refund to the taxpayer company rather than having to pay the additional tax claimed by HMRC. The statutory requirement to apportion amounts on a just and reasonable basis is relevant not only to SDLT but to other taxes also including corporation tax and given the few case law authorities on this issue the approach of the tribunal was helpful when it said at  that: “What is “just and reasonable” in a particular case will depend on the facts and circumstances of that case, including the parties’ views, in the context of the applicable law.” [Emphasis].
You can read the full decision here