Key Facts
- •Mr and Mrs Lynch purchased a property with a house, barn, cottage, and 22 acres of land for £3,075,000.
- •18 acres of the land were used by a local farmer to graze cattle.
- •The Appellants claimed overpaid Stamp Duty Land Tax (SDLT) on the basis that the property was mixed use due to the agricultural land.
- •HMRC denied the claim, stating the property was wholly residential.
- •The main issue was whether the 18 acres of grazing land constituted 'grounds' of the dwelling under section 116(1)(b) of the Finance Act 2003.
Legal Principles
Determining whether land forms part of a dwelling's 'grounds' involves a multifactorial test, considering various factors without any single factor being determinative.
Hyman v Revenue and Customs Commissioners [2019] UKFTT 469 (TC), Hyman and Others v HMRC [2021] UKUT 68 (TCC), Hyman and Goodfellow v HMRC [2022] EWCA Civ 185
The definition of 'residential property' in section 116(1) of the Finance Act 2003 and the definition of a 'dwelling' in paragraph 18 of Schedule 4ZA are essentially the same.
Finance Act 2003, section 116(1), Schedule 4ZA, paragraph 18
'Grounds' has a wide meaning, encompassing land attached to or surrounding a house, available for the owners' use, even if not actively used or purely ornamental. Commercial use of the land is a significant factor but doesn't automatically disqualify it.
Hyman [2019] UKFTT 469 (TC), Myles-Till v HMRC [2020]UKFTT 127, Harjono & Santoso v HMRC [2024] UKFTT 00228 (TC)
Outcomes
The appeal was dismissed.
The Tribunal found that the grazing land constituted 'grounds' of the main house, despite the farmer's use, because the Appellants retained control and the use wasn't wholly separate or unconnected to the dwelling's use. The arrangement wasn't deemed commercial enough to outweigh other factors.