Stamp duty land tax - residential or mixed use property

The taxpayers bought a six-bedroomed house described in the land agent’s particulars as a ‘family home set in about 4.5 acres’ with gardens swimming pool garaging stable yard and paddocks. They paid stamp duty land tax at the residential rate but later claimed for relief for overpaid tax. This was on the basis that the property had been misclassified as residential and should have be considered mixed use.

HMRC refused the claim saying the house had been correctly classified as residential (FA 2003 s 116).

The taxpayers appealed. They said the space above the garage was used as an office for the husband’s business and the stable yard and paddocks were let to a neighbour for grazing horses. Such non-residential use meant that the property was mixed use. Further because the paddocks were undeveloped land they were by definition non-residential.

The First-tier...