Footpath was part of residential property

The taxpayers completed on the purchase of a property in October 2022. They submitted a land and buildings transaction tax (LBTT) return on the basis the property was residential.

In September 2023 the taxpayers contacted Revenue Scotland to say the property included a footpath which was adjacent to it and therefore the transaction should be non-residential. They said under the title deeds of the property they were obliged to maintain the footpath. After an enquiry Revenue Scotland issued a closure notice concluding that the property was residential within the meaning of LBTTA 2014 s 59(1). The taxpayers appealed.

The First-tier Tribunal for Scotland said the title conditions were clear. The property included grounds but specified areas contained restrictions. Among these was the footpath which was a right of way and could not be used for any separate commercial purpose. However the taxpayers presented...