In HMRC v Christopher Brzezicki [2026] UKUT 00125, the Upper Tribunal (UT) allowed an appeal from HMRC, ruling that a property purchase that included a fishing stream and a separate island was residential for Stamp Duty Land Tax (SDLT) purposes.
HMRC appealed an earlier decision of the First Tier Tribunal (FTT). In Mr Brzezicki v HMRC [2024] TC9294, the appellant, a keen fisherman, claimed that his newly purchased land and property was Mixed-use and partly non-residential for SDLT purposes.
The FTT found that the land to the west of the stream and the stream itself did not form part of the garden and grounds and was therefore non-residential, allowing Mr Brzezicki's claim of mixed use.
The FTT found:
- The carrier stream was not being run on a commercial basis but was operating biologically to produce brown trout.
- The carrier stream was a factory to produce brown trout to be fly-fished in the River Meon. Consequently, the carrier stream and the island bounded by the carrier stream and the river Meon were non-residential land.
- Fishing rights attaching to the land at completion did comprise a right in or over land that subsisted for the benefit of the six-bedroom dwelling house. The fishing rights attached to the land forming part of the island, which was separated from the dwelling by the carrier stream. The fishing rights subsisted for the benefit of the land forming the island.
- The stream itself acted as a barrier, which rendered the island 'not contiguous' with the dwelling; therefore, there was a lack of contiguity, which prevented the island from forming part of the garden or grounds.
One of the tribunal members did not agree with the above findings and wrote a comprehensive and considered dissent, citing his opinion that the island and the stream did form part of the grounds.
HMRC appealed this decision to the Upper Tribunal (UT), believing the FTT erred in reaching its decision.
The UT found:
- The FTT had erred in its approach to the test in s116(1)(b) and s116(1)(c) Finance Act 2003.
- Although the stream bred trout naturally, it was not being run on a commercial basis. Commercial activities did occur, but only at a later date, months after the property was purchased.
- Applying the multifactorial test, at completion, the question wase whether the island and carrier stream formed part of the garden and grounds.
- The approach needed to refer to the ordinary meaning of the terms, namely, land attached to or surrounding a house that is occupied with the house and available to be used by the owners.
- The island was reached by two footbridges and was visible, proximate and in practical terms connected to the residential part of the property.
- The presence of the stream did not exclude the island from forming part of the garden or grounds.
- The biological functioning of the stream, even with engineered features, did not constitute commercial activity.
- The pre-existing condition of the stream, which required repairs, did not detract from the ability of the stream to serve as part of the dwelling grounds.
- The stream and island were sufficiently connected to the grounds and were contiguous to the house.
- All evidence pointed towards the stream and island undoubtedly forming part of the grounds.
The appeal was granted on all grounds.
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? When are gardens and grounds subject to higher rates of SDLT? What is a mixed rate?
SDLT: Residential property higher rates
A guide to the Stamp Duty Land Tax (SDLT) higher rate charge on residential property, when it applies and what reliefs are available to exempt buyers from the charge.
SDLT: MDR & Annexes Tool
MDR is no more; this Stamp Duty Land Tax (SDLT) Tool is handy if you are dealing with past claims and appeals. If you bought two or more properties in a single transaction, use this tool to see if you met the qualifying conditions. You may be able to claim both Multiple Dwellings Relief and relief from the Higher Rate Charge.
SDLT: Multiple Dwelling Relief and Annexes
What was Multiple Dwellings Relief (MDR)? When did it apply and how is it claimed?
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