HMRC publishes new guidance on the definition of ‘garden and grounds’ for SDLT purposes
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HMRC publishes new guidance on the definition of ‘garden and grounds’ for SDLT purposes
HMRC publishes new guidance on the definition of ‘garden and grounds’ for SDLT purposes
Wed 17 Jul 2019
HMRC has issued new guidance on what it views as acceptable for garden and grounds accompanying a residential property and what is other land with a non-residential purpose. The new guidance is set out on HMRC manual pages SDLTM00440 to SDLTM00480.
For further advice on the boundary of garden or grounds for UK SDLT purposes and the interaction with CGT, please get in touch with the Mazars indirect tax team.
What does the guidance say?
The guidance comments at SDLTM00440: The definition of ‘garden or grounds’ has been examined by the courts in the past, but never in the context of SDLT. Cases relating to other regimes can be helpful (see for instance Rockall v Department for Environment, Food and Rural Affairs [2008] EWHC 2408 (Admin)) but we must be careful of not being over reliant on them. For the purposes of SDLT there is no statutory concept of ‘reasonable enjoyment’ and no statutory size limit that determines what ‘garden and grounds’ means.
What becomes apparent is that, for example, the traditional view of ‘garden and grounds’ for CGT purposes (for example see CG64800 and TCGA 1992 s222(2)-(4)) may not be the definition of garden or grounds for SDLT purposes (see also SDLTM00480).
HMRC has been focussing in particular on the historic use of the land and whether that has been for a business purpose – in order to validate a claim for mixed use treatment for SDLT purposes (where there is a residential property sold with other land). However, there have been varying approaches within HMRC as to whether the mixed use treatment for a transaction is valid.
HMRC’s new guidance discusses the weighting to be placed on historic and future use at SDLTM00450, and their views of the distinction between ‘Garden or grounds’ and ‘other uses’ on SDLTM00460.
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