HMRC SDLT: SDLTM10023 – Mobile Homes, Caravans and Houseboats

Principles and Concepts of SDLTM10023

This section of the HMRC internal manual focuses on the tax implications and regulations concerning mobile homes, caravans, and houseboats. It provides guidance on how these types of dwellings are treated under UK tax law.

• Defines mobile homes, caravans, and houseboats for tax purposes.
• Explains applicable tax exemptions and liabilities.
• Outlines procedures for tax assessment and compliance.
• Offers examples of tax scenarios involving these dwellings.

Guidance on Stamp Duty Land Tax for Mobile Homes, Caravans, and Houseboats

Mobile Homes (Park Homes)

When it comes to Stamp Duty Land Tax (SDLT) laws, there is no specific rule that applies only to mobile homes or similar homes that are not permanently affixed. How SDLT applies to these mobile homes and the land underneath them depends on what kind of interest is being represented. This analysis is based on general land laws.

Key aspects that need consideration:

– The type of mobile home and how it is situated on the land.
– The potential separation of the home from the land it sits on.

Determining if the Mobile Home is Part of the Land

The first consideration is whether the mobile home is a part of the land beneath it or if it stands apart. This is determined by two main factors:

1. The intended use of the mobile home.
2. How firmly the home is connected to the land.

These are real facts that need to be evaluated in each situation.

According to legal rulings, if a structure is used as a dwelling, it is often assumed that it was built to enjoy the property as a whole, meaning it is likely to be considered a part of the land.

For example:

– If a mobile home is built on the land and serves clearly as a dwelling, it is generally treated as part of the land, even if the home can be disassembled and moved elsewhere.
– Even if the mobile home is not directly attached to the land, if it simply rests on foundations, it is still likely to be considered part of the land.

Conversely, a caravan can be moved relatively easily without demolishing anything. If this caravan is primarily intended for enjoyment rather than the actual land, it may be considered separate property (known as a ‘chattel’).

Key point: Even if a caravan connects to essential services like electricity or water, it doesn’t automatically mean it’s not a chattel, as long as those connections can be easily removed for relocation.

Lease or Licence?

Now, let’s look at the type of arrangement in which the mobile home is situated. The land can be leased or owned outright, which would mean SDLT is applicable.

Alternatively, if the arrangement allows for occupying a pitch for a caravan or mobile home without giving a full lease, it may just be a licence. In this case, the structure on the land does not affect the SDLT treatment.

The type of agreement made with the owner of the site is essential here. Sometimes, a document called a licence might be legally treated as a lease, or the opposite could occur.

Generally speaking:
– An agreement that provides exclusive use of a specific area for a specified number of years is likely a lease.
– If the terms of the agreement allow the site operator to relocate a mobile home or tourer to another pitch at their discretion, it is probably a licence.

For instance, a caravan site agreement may often be renewed on an annual basis. However, even if it has a longer fixed term, the biggest factor in determining whether it is a lease or licence will be whether the occupant has exclusive use of the plot.

Houseboats

If you have mooring rights on UK inland waterways or coastal areas, that will be regarded as an interest in land and may also incur SDLT.

Understanding Mooring Agreements

When there is a mooring agreement that grants the boat owner exclusive use of a berth for an agreed duration and a fee is paid, this is likely classed as a lease.

On the other hand, if the agreement allows the mooring operator to relocate the boat whenever necessary, or allows the operator access to the berth without prior notice, then it is more likely to be a licence and not subject to SDLT.

If the agreement is classified as a lease, SDLT will apply to any payment made for the lease. This could include the cost of the boat if it is sold or transferred along with the mooring rights and is permanently attached to the berth.

For example:
– If the boat can be swiftly disconnected from its essential services—like through easily removable fittings—and moving it does not damage the land structure, it is regarded as moveable property and would not incur SDLT.
– If there is a part of the boat that is firmly fixed to the land, and removing it would damage that land, it would be considered a fixture, thus liable for SDLT.

Key Considerations

Here are some important points to keep in mind regarding mobile homes, caravans, and houseboats concerning SDLT:

– The classification of a mobile home as part of the land or a separate property depends on its intended use and how it is affixed.
– The distinction between a lease and a licence is critical in determining SDLT liability.
– In the case of a houseboat, the mooring rights can have SDLT implications depending on the terms of the agreement.

Practical Examples

1. Mobile Home Scenario: Suppose you have a mobile home that you live in on a permanent pitch in a park. If it is designed to be a dwelling, even if it can be transported, it is likely treated as part of the land.

2. Caravan Scenario: Imagine a touring caravan that you can readily tow to different locations. If you’re simply parked on a site for the season, and it can be moved at any time, it will probably be classified as chattel.

3. Houseboat Scenario: Imagine you rent a berth for your houseboat where you have been granted exclusive rights for five years. If you pay a fee, it is likely a lease subject to SDLT. However, if the lease includes terms that allow the operator to move your boat, it becomes a licence without SDLT.

By understanding these distinctions, you’ll be better equipped to navigate the SDLT implications related to mobile homes, caravans, and houseboats.

Useful article? You may find it helpful to read the original guidance here: HMRC SDLT: SDLTM10023 – Mobile Homes, Caravans and Houseboats

View all HMRC SDLT Guidance Pages Here