Batey (HMIT) v Wakefield – the emergence of the ‘entity’ test

The taxpayer built a house for himself and his family in 1959 on 1.1 acres of land which he owned. After a number of burglaries in the area, including one suffered by him, he decided in 1966 to employ a resident caretaker and built for him a chalet bungalow, separated from the main house by only a tennis court and a hedge – apparently about 50 feet in length. (A full-sized tennis court would be 39 feet wide, including sidelines.) It had its own access from a separate road, and was separately rated from the main house. He sold the chalet bungalow in 1974, while retaining the remainder of the property. Exemption was claimed on the gain.

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