Ventilation shaft does not restrict residential use

In May 2018 the taxpayer bought a property for £19.75m and paid stamp duty land tax at the residential rate. Later on the advice of its agent the taxpayer amend the return on the basis that the property was mixed-use and claimed a repayment.

HMRC opened an enquiry and concluded the property was wholly residential.

The taxpayer appealed. It said there was a ventilation shaft for an underground railway tunnel in the garden and that Network Rail had rights under an indenture to come on the land.

The First-tier Tribunal noted that the indenture did reserve Network Rail the right to come on to the land at any time to carry out works. But it had to do the work ‘expeditiously’ and restore the area to its original condition. The tribunal considered this was ‘simply a right of way’ and did not prevent the land constituting the grounds...