Appeal finds transaction should have qualified for mixed-use rates
The First-tier Tax Tribunal (FTT) has ruled that the purchase of a barn conversion and its surrounding land should have been charged 5% stamp duty land tax (SDLT).
Gary Withers was initially charged 17% for the barn conversion and land on the basis that HMRC believed it was being used for residential purposes. However, Withers argued that the land should have applicable as a mixed-use transaction as only part of the land was being used for residential purposes, therefore he should have only been charged 5% SDLT.
The whole property includes 39 acres, the barn conversion, an annex, a lake, gardens and farmland for sheep. Withers admitted 12 of the 39-acre farm was used for residential purposes, but the rest was for commercial use. HMRC rejected this and ordered Withers to pay the full 17%. Withers appealed this decision to the FTT.
Withers submitted evidence that there was a commercial agreement with a local farmer to use some of the land for grazing rights. The FTT agreed that this qualified as a commercial deal. The FTT also discounted HMRC’s argument that the land surround the barn should be considered residential, and mixed-use rates should be applied to the purchase (Withers v HMRC, 2022).
Law firm Charles Russell Speechlys commented on the case that:
“Although the case does not create binding precedent, taxpayers can be cautiously optimistic that it is possible to successfully argue that property including a dwelling can in some circumstances be mixed use for SDLT purposes.”
