For an item to be regarded as a fixture or part of the land and
therefore chargeable to tax, as opposed to a chattel or moveable in
Scotland which is not chargeable, it must be annexed to the
property.
The issue will then turn on the degree and purpose of the
annexation, with emphasis being placed in many cases to purpose.
Where a purchaser agrees to buy a property for a price that
includes an amount properly attributed to chattels or moveables,
that amount will not be charged to stamp duty land tax.
Under stamp duty land tax a purchaser is responsible for the
accurate completion of their land transaction return, including the
entry for the consideration of the land transaction at box 10 in
form SDLT1.
By virtue of FA03/SCH4/PARA4 a just and reasonable
apportionment is required where a price is paid partly for a land
transaction and partly for a non-land transaction such as the
purchase of chattels.
It does not matter that the parties to a transaction may
agree a particular apportionment which is then documented in the
contract. The apportionment will not be correct unless it was
arrived at on a just and reasonable basis.
HM Revenue & Customs has the right to make enquiries into
the accuracy of a land transaction return. See
SDLTM80800+.
The apportionment of the purchase price may well be one
aspect on which an enquiry may be opened.
Similarly it is quite possible that we will also undertake
enquiries into cases where a deduction has been made for chattels
to confirm that those items properly fall within the definition of
chattels.
HM Revenue & Customs is unable to provide a comprehensive
list of items that are accepted as chattels or moveables. This is
because each case must be considered on its own merits and because
this is an area of the law that continues to evolve.
The following items are, however, confirmed as being assets
that will normally be regarded as chattels
On the other hand, the following items will not normally be regarded as chattels
Externally, any plants, shrubs or trees growing in the soil
which forms part of the land, are not to be regarded as chattels.
A deduction would, however, be appropriate for amounts
properly apportioned to any plants growing in pots or containers.
The above guidance is written primarily in the context of
sales of residential property.
HM Revenue & Customs is advised that the same principles
will apply when considering the purchase of industrial or
commercial property in which the sale may also involve the
acquisition of plant, machinery or equipment.
The question of whether plant or machinery is a fixture or a
chattel is determined in the same way as for any other asset.
In particular tenants fixtures in England, Wales and Northern
Ireland are fixtures and therefore part of the land,
notwithstanding that a tenant may have a right to sever them.
The tenant's right of severance is also a chargeable interest
within the meaning of FA03/S48(1).
While each case depends on its own facts it is unlikely that
plant or machinery that can be relatively easily severed from the
property to which it is fixed, for example by the simple expedient
of removing some bolts securing it to the floor or walls, will be a
fixture.
Alternatively heavy plant or machinery that is integral to a
building, or plant or machinery whose removal would damage the
building or land, is likely to be a fixture.
It follows therefore that escalators and elevators, boilers,
furnaces, walk-in refrigerators and restaurant cooking stations are
likely to be fixtures.
