Land that forms part of the grounds of a house

The decision covered three separate First-tier Tribunal cases in which the taxpayers each bought a house with an area of land. The issue was whether all of the land sold together with the house was or formed ‘part of the garden or grounds of’ the house. The rate of stamp duty land tax payable on the total consideration for each sale depended on the answer to that question.

The taxpayers argued that not all the land formed part of the property but that it should be treated as mixed use. The First-tier Tribunal found in favour of HMRC in each case so the taxpayers appealed to the Upper Tribunal.

The issue was the interpretation of FA 2003 s 116. The taxpayers said land could be part of the garden or grounds of the house only if it is ‘needed for the reasonable enjoyment’ of the house ...