In Mr David Hyman and Mrs Sally Hyman [2019] TC7271 a Stamp Duty Land Tax claim that a property sitting in 3.5 acres of land was ‘mixed use’ and not residential failed.
- A couple bought a property known as “The Farmhouse” for £1,515,000, it included with over 3.5 acres of land including house and gardens, a barn, a meadow and a bridleway.
- They submitted an Stamp Duty Land Tax (SDLT) return and paid SDLT of £95,550 at the residential rate.
- SDLT specialists advised that as the land was of mixed use: the barn, meadow and bridleway were not “interests in or rights over land that subsist for the benefit the dwelling” and therefore did not fall within the definition of residential property for SDLT. They recommended that a non-residential rate of SDLT should apply and submitted a claim for repayment of £34,950 overpaid SDLT.
- HMRC did not agree with the refund claim. They argued that “grounds” are simply the land surrounding a house which are available as an amenity for the dwelling and the use (or non-use) to which the land is put is not relevant.
- The taxpayers’ appealed HMRC’s decision.
The First Tier Tribunal (FTT) held that for SDLT purposes, “residential property” means a building that is used as a dwelling and land that is or forms part of the garden or grounds of the dwelling including a building on such land.
- Grounds has a wide meaning, is clearly a term which is more extensive than “garden” which connotes some degree of cultivation.
- It is not a necessary feature of grounds that they are used for ornamental or recreational purposes.
- Grounds need not be used for any particular purpose.
- Land would not constitute grounds to the extent that it is used for a separate, eg commercial purpose. It would not then be occupied with the residence, but would be the premises on which a business is conducted.
It dismissed the appeal: tax was correctly paid on that basis.
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Stamp Duty Land Tax: residential higher rates, what is a dwelling?
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Mr David Hyman and Mrs Sally Hyman [2019] TC7271