A small group of taxpayers have lost their appeal at the Court of Appeal (CoA) concerning Stamp Duty Land Tax (SDLT) whereby they were hoping to use the lower non-residential rates on their acquisitions of houses with large gardens. Each of the two couples had purchased homes with gardens more than 0.5 hectares large.
The legislation defines ‘land that is or forms part of the garden or grounds of a building‘ as being subject to the higher residential rates where the building in the garden or grounds is a residential building. The taxpayers tried to argue that there was a physical limit to the amount of land that could be included as garden or grounds despite the legislation not indicating so. They held that there was an amount of land that was needed for the ‘reasonable enjoyment of the dwelling’.
The taxpayers referred to HMRC guidance issued about a stamp duty relief that was available in disadvantaged areas as well as referring to the 0.5 hectare limit within the legislation for relief against capital gains tax on disposal of a principle private home.
The CoA disagreed, finding that the evidence submitted, the old HMRC guidance, was inadmissible and irrelevant. The guidance was regarding stamp duty and SDLT had replaced stamp duty and any of the ‘intellectual baggage’ of stamp duty shouldn’t be carried into SDLT. The CoA also noted that the relief against capital gains tax (CGT) was a relieving provision within the CGT legislation, and therefore entirely at odds with a charging provision within the SDLT legislation and relating to an entirely different statutory tax scheme. The CGT relief provisions ensured that taxpayers didn’t take too much advantage of the relief, ie some of the excess land would be chargeable but the charging provision within the SDLT legislation ensured as much as land as possible would be charged at the higher rate.
The appeal was dismissed as were all other appeals at the lower tribunals.
The decision can be found at: David Hyman & Anor. v The Commissioners for HMRC – Find case law (nationalarchives.gov.uk)
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