Stamp Duty Land Tax – Mixed Use update

On 25 June 2019 HMRC issued updated guidance on the meaning of ‘garden and grounds’ for the purposes of Stamp Duty Land Tax (SDLT). In considering whether or not a mixed-use rate of SDLT can apply to the purchase of a country house, questions are commonly raised by HMRC on the extent of land at the property, and whether or not it is to be considered as ‘garden’ or ‘grounds’ reasonably necessary for the enjoyment of the house being purchased.

HMRC’s update comments that ‘garden and grounds’ should be given its natural meaning and that there is no statutory size limit on what ‘garden and grounds’ means, though claims for Basic Payment Scheme payments will be considered pertinent when considering whether the land actually is ‘garden or grounds’ or whether it has a genuine commercial use.

By extension, the minimum area of land that must be actively farmed to claim Basic Payment Scheme payments is 5 hectares, which comes to just over 12.35 acres, so it would appear this could be used as a benchmark for minimum acreage for mixed use claims.