SDLT legislation does not make specific provision for mobile
homes and the SDLT treatment of these homes, and the pitches on
which they stand, will depend on the nature of the interest which
they represent. This is a matter of general land law.
The structure of the mobile home, and the pitch on which it
stands, need to be carefully considered and may need to be treated
separately.
The land on which the mobile home stands (including the home
itself if it forms part of the land) may be the subject of a lease,
the grant or assignment of which is chargeable to SDLT, or of a
mere licence to occupy land, which is not a chargeable interest for
SDLT purposes.
This will depend on the details of the agreement with the
site operator. It is important to note that a document described as
a licence may sometimes in law be a lease, or vice versa.
However, generally speaking, if the agreement grants
exclusive occupation of a particular pitch for a term of years it
will be a lease, while if it includes provision to move the home to
an alternative pitch at the site operator’s request, or to
allow the site operator free access to the property and/or the
land, then it is likely to be a licence.
If the structure of the mobile home does not form part of
the land it will be a "chattel" and not a chargeable interest for
SDLT purposes. “Chattel” means any tangible movable
property (or, in Scotland, corporeal movable property) other than
money.
The Courts have held that a structure which can be readily
moved from place to place without damaging the fabric of the land,
or which can be dismantled and re-erected elsewhere, is likely to
be a chattel. On the other hand, a building which cannot be moved
without demolishing it will form part of the land.
A structure will not necessarily be precluded from being a
chattel merely because it is connected to main services, provided
that those connections can be readily disconnected to facilitate
removal.
In Scotland, a lease of residential property must include
provision for rent, separately from the management charge, and
cannot have a duration in excess of twenty years.
Similar considerations will apply to static caravans although it
is unlikely that such structures will be treated as fixtures as
they are usually mobile and not permanently attached to the land.
Even if they are fixed, the amount of consideration will rarely be
above the 1% threshold (but notification may be required if above
£40,000).
It is usual for caravan site agreement to be renewed
annually but, even where there is a longer fixed term, the question
of exclusive possession of the site will be the main factor in
deciding whether this is a lease or a licence.
As with mobile homes, above, if the site operator has the
right to move the van around the site should this be necessary, or
allows the site operator to access the pitch/van without notice,
this is more likely to be a licence and not liable to SDLT.
Mooring rights on UK inland waterways or coastal waters will
constitute an interest in land which may be liable to SDLT.
If the mooring agreement grants exclusive possession of a
berth to the boat owner for a term and a payment is made this is
likely to be a lease. If the agreement permits the operator of the
moorings to move the boat onto another berth should this be
necessary, or allows the operator to access the berth without
notice, this is more likely to be a licence and not liable to SDLT.
If the agreement is a lease, SDLT will be due on the
consideration given for the grant or assignment of the lease. This
may include the sum paid for the boat if ownership changes hands
with the mooring agreement and the boat is permanently attached to
the mooring (so is a fixture rather than a chattel).
If the boat can be easily disconnected from main services
(for example, by means of ‘push fit’ fittings) and
removal from its moorings would not damage the fabric of the land
then it will be treated as a chattel and not liable to SDLT. If
however, there is a structure which forms part of the boat itself
which in turn is permanently secured to the land and to move this
would involve damaging the fabric of the land then it will be
treated as a fixture and will attract SDLT.
New mobile home purchased 01.11.08 for £180,000 with a
pitch agreement for a term of 35 years from 01.11.08 paying a rent
of £2,000pa.
The first question relates to the land itself. Do we have a
lease which may be liable to SDLT, or is it a licence which will
not? To establish this we look at the pitch agreement. If this
grants exclusive possession to the home owner for the term and a
payment is made this is likely to be a lease. If, however, the site
operator has the right to move the home around the site should this
be necessary, or allows the site operator to access the pitch/home
without notice, this is more likely to be a licence and not liable
to SDLT.
If the agreement is a licence, no SDLT is payable
(FA03/S48(2)(b)) and the nature of the structure on the land is
irrelevant.
If the agreement is a lease, SDLT will be due on the rental
element (in this example this would be at the nil rate). SDLT may
also be due on the sum paid for the structure on the land, if the
structure is a fixture rather than a chattel.
In considering whether the home is a fixture or a chattel,
we will look in particular at how is it secured and whether it
forms part of the land.
If the structure can be easily disconnected from main
services (if, for example, it uses ‘push fit’ fittings)
and removing it from the site would not damage the fabric of the
land, then it would be treated as a chattel and not liable to SDLT.
If however, there was some degree of permanency (if, for
example, the home sits on footings which are part of the land and
these are permanently secured to it, so that moving it would
involve damaging the fabric of the land) then it will be treated as
a fixture and will attract SDLT. In this case this would be 1% on
the £180,000 premium. It is irrelevant whether gardens/decking
have been constructed around the site as long as any removal of the
home would not damage the land itself.
Existing mobile home purchased 01.11.08 for £180,000 with a
pitch agreement for a term of 35 years from 31.07.2005 paying a
rent of £2,000pa.
As above, we must decide whether there is a lease or a
licence. If there is a licence, this will not be chargeable to
SDLT.
If there is a lease, we then consider whether the structure
is regarded as a fixture or a chattel. Where it is a fixture, SDLT
will be due at 1% on the consideration for the assignment,
£180,000. If it is a chattel, there is no charge to SDLT
unless any part of the consideration can be apportioned to the land
itself rather than the home.
