Key Facts
- •Appeal against a closure notice increasing Stamp Duty Land Tax (SDLT) from £169,500 to £330,750.
- •Dispute over whether a paddock was part of the grounds of the dwelling house for SDLT purposes.
- •Appellants treated the property as mixed-use (residential and non-residential) in their self-assessment.
- •HMRC considered the property entirely residential.
- •Appellants leased the paddock for grazing shortly after purchase.
- •The paddock was on a separate Land Registry folio from the main house and gardens.
- •The paddock was not visible from the house and had limited access from the main garden.
Legal Principles
Definition of "residential property" for SDLT purposes, including the meaning of "garden or grounds".
Section 116(1), Finance Act 2003
SDLT is charged on land transactions; differing rates for residential and non-residential properties.
Sections 42, 43, 48, 53, Finance Act 2003
Court of Appeal decision declining to objectively define "grounds" for SDLT purposes.
Hymen and Goodfellow v HMRC [2022] EWCA Civ 185
Relevant factors in determining whether land forms part of a dwelling's grounds: historic and future use; layout; proximity; extent; legal factors/constraints.
James Faiers v HMRC [2023] UKFTT 00297 (TC)
Land is not part of the grounds if used for a separate, commercial purpose.
Various FTT and UT cases including Withers v HMRC and Hyman v HMRC
Outcomes
Appeal allowed.
The paddock was not part of the dwelling's grounds due to its separate use (commercial grazing lease), distinct Land Registry title, lack of visibility from the house, and limited access.