In Vereley Homes Limited v HMRC [2026] TC09881, the First Tier Tribunal (FTT) found that a fenced-off and overgrown plot of land, which previously formed part of a demolished neighbouring property, constituted part of the garden or grounds of an adjacent dwelling for Stamp Duty Land Tax (SDLT) purposes.
Vereley Homes Limited (VHL) purchased two adjoining registered titles on 7 September 2023, which had been in common ownership since 2004. These were known as No.7 and No.9 Saltern's Way, Poole.
- No.7 contained a Residential dwelling throughout.
- A garage was attached to the house on No.7, which encroached onto the land of No.9 and straddled the boundary between the two titles. Planning permission had been granted in 2000.
- The house at No.9 was demolished around 2011, having been unoccupied for approximately 30 years.
- Following demolition, the rear garden of No.9 was integrated into the garden of No.7 (Plot 1).
- The former footprint of the No.9 house, along with its front garden, was fenced off and turfed (Plot 2). Plot 2 was accessible from the road via two wooden gates.
- In 2011, a neighbouring owner wrote to the Borough of Poole Council recording that the owner of No.7 had taken the garden of No.9 and intended to flatten the remainder and create a memorial garden.
- The previous owner of No.7 and No.9, Cedric Sansom, died in 2020.
- The property was vacant between his death and VHL's acquisition in September 2023, during which time Plot 2 became overgrown with weeds and fallen branches.
- Prior to VHL's acquisition of the property, it was marketed by Savills as '7–9 Saltern's Way' and described as a detached house with land in a prime location adjacent to Poole Harbour.
- VHL filed its Stamp Duty Land Tax (SDLT) return on the basis that Plot 2 was non-residential land, and as the acquisition consisted partly of non‑residential property, the Lower 'mixed use' SDLT rates applied.
- HMRC issued a Closure notice on 19 September 2024, charging the Higher residential rates applicable to a corporate purchaser under Schedule 4ZA FA 2003, increasing the SDLT liability by £82,750.
- VHL appealed to the First Tier Tribunal (FTT), contending that Plot 2 was not part of the garden or grounds of No.7.
The sole issue before the FTT was whether Plot 2 formed part of the 'garden or grounds' of the dwelling on Plot 1 within the meaning of s.116(1)(b) FA 2003. The FTT found that:
- Referring to the Upper Tribunal decision in HMRC v Suterwalla [2024] UKUT 188, a multi-factorial assessment of sixteen pointers was required.
- This included assessment of physical, historical and functional connections between the land and the dwelling.
- There was a deliberate gap in the fence between Plot 1 and Plot 2, with a concrete step-like area in front of it that was designed to mitigate a roughly two-foot height difference between the plots.
- This was evidence of an intentional access route between the two areas.
- Although the gap in the fence had become concealed by dense vegetation by the time of VHL's acquisition, meaning its directors were unaware of it when they inspected the site, this did not sever the connection between the plots. The overgrowth could relatively easily have been cleared and the access route reinstated.
- The well-kept and clearly maintained appearance of Plot 2 in earlier photographs supported the conclusion that it had historically been used as a garden for the dwelling on Plot 1.
- This was consistent with the previous owner's stated intention to create a memorial garden.
- There were no legal or other constraints on the use of Plot 2, and at no point had it been used for any purpose separate from or unconnected with the dwelling on Plot 1.
- The encroachment of No.7's garage onto the land of No.9, together with the integration of No.9's rear garden into No.7's garden, demonstrated that the No.9 plot had generally been used to benefit the occupation of No.7.
- Standing back and viewing the evidence in the round, Plot 2 was part of the garden or grounds of the dwelling on Plot 1 at the effective date of the transaction.
- As such, the transaction was wholly residential, and VHL was liable to SDLT at the higher rates applicable to corporate purchasers.
The appeal was dismissed.
Useful guides on this topic
SDLT: Residential property & dwellings
What is residential property for Stamp Duty Land Tax (SDLT)? What tax rate applies? What gardens and grounds are subject to higher rates of SDLT?
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: 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: At a glance, Stamp Duty Land Tax, rates & allowances
What is Stamp Duty Land Tax (SDLT)? What are the rates of Stamp Duty Land Tax (SDLT)?
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