Land attached to house was not residential property

The taxpayer and his wife bought a property comprising a dwelling house an independent annexe and about 39 acres of gardens fields and woodlands. They submitted a stamp duty land tax return claiming mixed use. This was on the basis that part of the land was used by a grazer for his sheep for a nominal rent and had been so used for 20 years. In addition some of the land fell under a Woodland Trust rewilding scheme.

HMRC said the land acquired was wholly residential on the basis that the grazing and rewilding land constituted ‘grounds’ of the dwelling (FA 2003 s 116(1)(b)).

The taxpayer appealed.

The First-tier Tribunal said it was common ground that the dwelling house and annexe were residential property; the issue was whether all the land was part of the garden and grounds of the property. The judge did not accept HMRC’s submission...