Sangeeta Modha v The Commissioners for HMRC
[2023] UKFTT 783 (TC)
Simon Holding & Anor v The Commissioners for HMRC
19 April 2024
[2024] UKFTT 337 (TC)
First-tier Tribunal
A couple bought a big farmhouse with lots of land, including some fields. They argued they shouldn't pay as much tax because the fields weren't part of the house's garden. The judge looked at how the land was used and decided the fields were part of the property, so the couple had to pay more tax.
Key Facts
- •Appeal concerning SDLT liability on the purchase of Hall Farm for £4.6m on 29 August 2018.
- •Dispute over whether 24 acres of fields (the Fields) formed part of the residential property's grounds for SDLT purposes.
- •Appellants argued the Fields were non-residential, leading to a lower SDLT rate.
- •HMRC argued the Fields were part of the grounds, resulting in a higher SDLT rate.
- •The property included a Georgian farmhouse, outbuildings, equestrian facilities, and gardens.
- •The Fields were used for grazing horses (partially) and were managed by an agricultural contractor for haylage production.
- •Visibility of the Fields from the farmhouse was limited.
- •Appellants' solicitor commissioned an environmental report which described the land use as 'agriculture'.
Legal Principles
Definition of "residential property" for SDLT purposes under section 116(1) Finance Act 2003.
Finance Act 2003
Meaning of "grounds" in section 116(1)(b) FA 2003; not solely determined by reasonable enjoyment of the dwelling.
Hyman v HM Revenue & Customs [2022] EWCA Civ 185
Evaluative approach in determining whether land forms part of the grounds, considering all relevant facts and circumstances.
The How Development 1 Limited v HM Revenue & Customs [2023] UKUT 00084 (TCC)
Factors relevant in determining whether land forms part of the grounds (e.g., connection to dwelling, contiguity, use, accessibility, etc.).
39 Fitzjohn’s Avenue Limited v HM Revenue & Customs [2024] UKFTT 28 (TC)
Relevant date for determining the nature of the land is the date of completion of the transaction.
Ladson Preston Limited v HM Revenue & Customs [2022] UKUT 00301 (TCC)
Outcomes
Appeal dismissed.
The Tribunal concluded that the Fields, including Field 11, formed part of the grounds of the Farmhouse at the time of the transaction. The Fields provided amenities and benefits to the farmhouse, such as winter grazing and options for keeping animals, even if passively, and enhanced the rural character of the property. While substantial in size, this was not deemed disproportionate for a large country property.