In Gary Withers v HMRC [2022] TC08649, the First Tier Tribunal (FTT) found that land purchased with a dwelling house was not residential property for SDLT purposes. A longstanding grazing license and agreement with the Woodland Trust gave the land a separate function other than garden and grounds.

  • This case concerned the Stamp Duty Land Tax *SDLT) on the purchase of a property comprising of a dwelling house, an independent annexe and 39 acres of gardens, fields and woodlands for total consideration of £2.5m.
  • 20 acres of the farmland was let under a long-standing grazing licence to a third party in return for £800 per year at the time of purchase.
  • Five acres of woodland were occupied in conjunction with the Woodland Trust.
  • The Stamp Duty Land Tax return was completed on the basis that the purchase did not solely represent Residential Property and included a claim for Multiple Dwellings Relief.
  • HMRC raised an enquiry and issued a closure notice on the basis that the acquisition was not mixed-use, it was solely a residential property.
  • Following a Statutory Review which confirmed HMRC’s position the taxpayer Appealed to the FTT.

The FTT found that:

  • It was common ground that the dwelling house and annexe were residential property, the disagreement was the extent to which the associated land represented garden and grounds of those residential properties.
  • Land did not cease to be garden or grounds merely because the occupier of a residential property could do without it, the land needed to have a function other than garden or grounds.
  • The longstanding (20+ year) grazing licence gave the associated land a self-standing function over and above garden or grounds of the dwelling:
    • The licence was for the grazing of sheep, this was seen as a more commercial operation than the grazing of horses.
    • The grazing land cannot be seen from the dwelling and does not provide privacy, peace and space for the dwelling.
    • While the rent for the grazing land was low, the farmer was responsible for some maintenance was an additional benefit which made the arrangement commercial.
  • The Woodland Trust land also has a self-standing function other than as garden or grounds of a dwelling as:
    • It was being used to improve the environment and rewilding in a controlled way.
    • The arrangement was commercial in that the Woodland Trust was responsible for some of the maintenance costs associated with the land.
  • The purchase, therefore, represented the acquisition of a chargeable interest in residential and non-residential property.

The appeal was allowed.

Useful guides on this topic

SDLT: Stamp Duty Land Tax, start here
What is SDLT? What are the SDLT rates? What is exempt from SDLT? What reliefs are available? When are returns due? When can you amend a return?

SDLT: Residential property & dwellings
What is residential property for Stamp Duty Land Tax (SDLT)? What tax rate applies? What garden and grounds are subject to higher rates of SDLT?

SDLT: Multiple Dwelling Relief (MDR)
What is Multiple Dwellings Relief (MDR) for Stamp Duty Land Tax purposes? When does it apply and how is it claimed?

SDLT: MDR & Annexes Tool
If you are buying two or more properties in a single transaction use this tool to see if you meet the qualifying conditions and you may be able to claim both Multiple Dwellings Relief and relief from the Higher Rate Charge.

External links

Gary Withers v HMRC [2022] TC08649

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