Adjacent properties are residential

The taxpayer and his wife bought the leaseholds of two properties – Old Valley Barn and The Granary - which were registered under two title numbers at the Land Registry. The purchase price was for both titles and not allocated between them. The taxpayer submitted a stamp duty land tax return on the basis that the transaction was mixed use. After an enquiry HMRC amended the return to the effect that the transaction was entirely residential.

The taxpayer appealed. He said The Granary was separate from Old Valley Farm and was sold with planning permission for development. It was farmed commercially by a third party and should not be regarded as forming part of the grounds of Old Valley Farm.

The First-tier Tribunal said the purchase was of two chargeable interests which were held in common ownership. The test of whether adjoining land formed part of the grounds was...