Case facts. In Hyman v HMRC, the taxpayers paid SDLT on the basis that a farmhouse set on 3.5 acres of land was wholly residential but later claimed that parts of the land were non-residential and applied for a refund of circa £35,000. SDLT is charged at lower rates on the entire purchase price where the land is either non-residential or includes land that is non-residential. The land in question comprised of a barn, meadow and public bridleway. The bridleway was used by the family in the same manner as the public and the meadow was used to walk the dog and keep chickens. The barn was used to store gardening equipment and the taxpayers could not convert it into a residential building without planning permission.

Decision. The judge concluded that all three elements formed part of the grounds of the residential land. The ordinary meaning of grounds is land attached to or surrounding a house which is occupied with the house and is available to the owners of the house for them to use. This means that the land in question did not need to be used in a specific manner to qualify as residential, being available for use was sufficient. Land would not constitute grounds to the extent that it is used for a separate, e.g. commercial purpose. It would not then be occupied with the residence, but would be the premises on which a business is conducted.

Tip. When claiming that land or property is non-residential, there needs to be clear commercial use. Showing that the land is overgrown, unsuitable or that other people have rights to it will not secure an SDLT reduction. Ensure you have all of the facts before applying reduced SDLT rates for mixed land and property.

The full transcript can be found here

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