A failed claim for Stamp Duty Land Tax exemption on part of a property on which sheep would graze has cost home owners nearly £50,000 after a first tier tribunal (FTT) ruled the use of the field was “intermittent” and the grazing counted as “maintenance”.
Couple Ian Sinclair and Diana Chilvers bought the Grade II listed property in Sussex for £1.8 million in 2024. The SDLT return was filed claiming part of the property was non-residential/ mixed use which gave rise to SDLT of £80,000, which was duly paid.
The issue arose when HMRC issued a notice of enquiry in November 2024 and a subsequent closure notice in January 2025, claiming the field was part of the grounds of the property. A bill of £48,450 was raised for the unpaid tax. The appeal to the FTT was submitted in May 2025.
Sinclair and Chilvers claimed the field was in commercial use at the date of completion of purchase of the property, used as agricultural land by a neighbouring farmer who was given access to graze sheep on the field by a previous owner; a commitment Sinclair and Chilvers honoured once the property was in their ownership.
They claimed this use of the land exempted it from the residential rate of SDLT.
HMRC’s case outlined how “commercial use is not determinative, and even if relevant, it must be substantial; limited or incidental use will not prevent land from being classified as grounds”. The grazing activity was “minimal, irregular, and incidental” describing the relationship between the property owners and the farmer as a “barter of convenience”. Sinclair and Chilvers retained full control over the field, including the “ability to prevent or terminate any grazing”.
The tribunal took into account the property particulars, which described the field as a “garden and paddock”, and is “consistent with the presentation of the Field as part of the grounds of a rural residential property,” adding “absent the grazing arrangement, there would therefore be little difficulty in concluding that the Field formed part of the grounds of the dwelling.”
The appeal was dismissed with the SDLT payment of £48,450 due to HMRC.
