In Alan Wood & Anor v HMRC [2026] TC09791, the First Tier Tribunal (FTT) found that the lower mixed-use rates of Stamp Duty Land Tax (SDLT) applied to the purchase of a riverside property with a public towpath running alongside it. The towpath did not form part of the grounds of the house, meaning the acquisition did not consist entirely of residential property.
Alan Wood and Elizabeth Veitch jointly purchased a property for £4.5 million on 29 June 2023.
- They filed a Stamp Duty Land Tax (SDLT) return the next day, treating the property as an additional residential property, which generated an SDLT liability of £586,250.
- On 16 November 2023, their accountants submitted an Amendment to the return on the basis that the property comprised both residential and non-residential land, specifically that the public towpath running across the land rendered the purchase mixed-use, reducing the liability to £214,500 and entitling them to a refund of £371,750.
- HMRC opened an enquiry on 6 August 2024 and issued Closure notices on 17 September 2024, concluding that no amendment was required and Mr Wood and Ms Veitch were not entitled to a refund of SDLT.
- Mr Wood and Ms Veitch Appealed on 15 October 2024.
- The property comprised several parts:
- The house, a seven-bedroom dwelling.
- A garden separated from the towpath by a 1.3m-high brick wall. The wall contained a single gate, which provided pedestrian access between the garden and the towpath.
- The towpath, forming part of the 185-mile Thames Path National Trail.
- The chain link fence, which had a small "private property" sign hanging from it, separating the towpath from the riverside land.
- The riverside, a strip of private grass on the bank of the River Thames.
- A jetty adjacent to the riverside providing a private mooring for use by owners of the property was not, and did not form, any part of the property.
- The towpath was undisputedly a public right of way, heavily used by walkers, runners, families, cyclists, and dog-walkers.
- Mr Wood and Ms Veitch produced detailed evidence of towpath usage by recording activity over several days.
- Their data showed an average of 850 users per day, a finding HMRC did not challenge.
- The evidence also showed that due to this heavy use, Mr Wood and Ms Veitch could not sit, relax, or leave items on the towpath, nor alter its appearance.
- Under Section 55 Finance Act (FA) 2003, mixed-use (non-residential or part non-residential) property is taxed under "Table B: non-residential or mixed", whereas wholly residential property is taxed under the Higher rates in "Table A: residential".
- Whether land is 'residential' depends on s.116 FA 2003, which classifies as residential:
- Buildings used or suitable for use as a dwelling.
- The garden or grounds of such a building.
- Rights or interests benefiting the dwelling or its grounds.
- On 10 November 2025, HMRC made an application to amend the statement of case to include a new argument.
- In addition to being 'residential property' under s.116(1)(b), the towpath and riverside also were 'residential property' under s.116(1)(c).
The First Tier Tribunal (FTT) applied the decision in Suterwalla v HMRC [2024] UKUT 00188. It found that:
- There was a connection between the house, towpath and riverside, and these were contiguous and under common ownership.
- As a public right of way, other people clearly had rights over the towpath.
- This in itself did not make it any less the grounds of the house.
- It was the level of intrusion, with roughly 850 users per day, rather than it being a public footpath, together with the lack of privacy and security, that took it outside s.116(1)(b).
- The use of the towpath was also separate from, and unconnected with, the house and garden from which it was separated by the wall.
- Because the towpath was non-residential land, the property did not consist wholly of residential property.
- As a result, mixed-use SDLT rates applied.
The FTT briefly set out their conclusions on the use of the riverside, although this was not necessary following the conclusion on the use of the property:
- Despite a lack of privacy and security, the riverside was for the sole use of the house, with very little intrusion by the public.
- Unlike the towpath, it would be possible for the occupants of the house to sit or relax on the riverside.
- It was also possible to alter its appearance and character.
- The riverside was part of the grounds of the house on this basis.
HMRC's argument that the freehold estate constituted a 'right' benefiting the dwelling was rejected.
- A single freehold estate cannot be a right benefiting itself, so s116(1)(c) could not apply.
The appeal was allowed.
Useful guides on this topic
SDLT: Amending returns & refunds
How do I amend an SDLT return? When can I amend an SDLT return? How do I claim an SDLT refund? How do I deal with contingent consideration?
SDLT: Residential property & dwellings
What is residential property for Stamp Duty Land Tax (SDLT)? What tax rate applies? What garden and grounds are subject to higher rates of SDLT?
SDLT: At a glance, Stamp Duty Land Tax, rates & allowances
What is Stamp Duty Land Tax (SDLT)? What are the rates of Stamp Duty Land Tax (SDLT)?
SDLT: Residential property higher rates
A guide to the Stamp Duty Land Tax (SDLT) higher rate charge on residential property, when it applies and what reliefs are available to exempt buyers from the charge.
Paddock not residential for SDLT
In Mr Taher Suterwalla and Mrs Zahra Suterwalla v HMRC [2024] UT 00188, the Upper Tribunal (UT) upheld the First Tier Tribunal's (FTT's) decision that a paddock was not part of the grounds of a residential property.
Closure notices
When does HMRC issue a Closure Notice? Can a taxpayer demand one? Are there appeal rights?
How to appeal an HMRC decision
Disagree with an HMRC decision? How do you appeal, what type of decision can you appeal and what are your different options when you disagree with HMRC? What are the key steps in making an appeal?
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