Communal and Inaccessible Areas Not Dwellings

HM Revenue and Customs (HMRC) have now issued guidance which will come as a disappointment, but not a surprise, to developers of student residences for universities and the like. The approach taken is said by HMRC to apply to all other forms of multiple-occupancy dwellings and will affect the tax position of such developments.

Whilst HMRC are now willing to recognise that student residences constitute 'dwelling houses', any areas to which the residents do not have access will not constitute a dwelling house and neither will any communal areas. Accordingly, shared kitchens, lounges and bathrooms will not constitute part of the dwelling and neither will staircases nor landings.

Partner Note
Ref: section 35 CAA 2001. See also the guidance at http://www.hmrc.gov.uk/briefs/company-tax/brief6608.htm.

Telephone: +44 (0) 1753 486 777 (Slough Office)
Telephone: +44 (0) 1189 596031 (Reading Office)