At first blush, Mr and Mrs Averdieck’s arguments seem ridiculously far-fetched. How could the fact that a public right of way crosses your land possibly affect the SDLT payable on your purchase? And indeed they lost their case before the First-tier Tribunal (FTT) (J Averdieck and another v HMRC [2022] UKFTT 374 (TC), reported at page 4). But a careful examination of the facts shows things weren’t so simple.
The purchase was of a substantial house in 14 acres. Nonetheless the purchasers claimed that the property was not ‘entirely residential property’, because it included something other than a dwelling and its grounds – so the ‘non-residential’ rate of SDLT should apply, saving nearly £120,000.
An earlier case stated that: ‘The fact that there is a right of way over grounds might impinge on the owners’ enjoyment of the grounds and even impose burdensome obligations on them, but such rights do not make the grounds any the less the grounds of that person’s residence.’ That must surely be correct, and it evidently influenced the FTT.
But the Averdiecks’ case concerned not a mere footpath running across the grounds but a roadway which ran along two sides of the property and served as access to a neighbouring farm and a small residential development. Ownership of the lane – which was 500m long and had even acquired a name – came with onerous maintenance obligations. The Averdiecks tried, unsuccessfully, to exclude it from their purchase of the property but had been told that it was part of the ‘package’.
The main argument put before the FTT was that the lane was used for a commercial purpose (namely, access to the farm) and that this robbed it of its status as ‘grounds’ of the house. The FTT rejected that, as it did the argument that the lane had no ‘functional use for the property’ (rightly, since that is not part of the statutory test).
Perhaps there would have been more chance of success if the case had been met head-on: that a roadway which does not cross your property but runs along the extreme edge of it and is separated from it by a fence, trees and established hedgerow is simply not, on ordinary use of language, part of your grounds. Would the man on the Clapham omnibus describe a farmer driving his tractor along the lane to reach his farmyard as ‘crossing the Averdiecks’ grounds’? Surely not.
We look forward with bated breath to an appeal to the Upper Tribunal.
Home >Articles > Averdieck: were grounds mixed use?
Averdieck: were grounds mixed use?
A road to SDLT reduction?
At first blush, Mr and Mrs Averdieck’s arguments seem ridiculously far-fetched. How could the fact that a public right of way crosses your land possibly affect the SDLT payable on your purchase? And indeed they lost their case before the First-tier Tribunal (FTT) (J Averdieck and another v HMRC [2022] UKFTT 374 (TC), reported at page 4). But a careful examination of the facts shows things weren’t so simple.
The purchase was of a substantial house in 14 acres. Nonetheless the purchasers claimed that the property was not ‘entirely residential property’, because it included something other than a dwelling and its grounds – so the ‘non-residential’ rate of SDLT should apply, saving nearly £120,000.
An earlier case stated that: ‘The fact that there is a right of way over grounds might impinge on the owners’ enjoyment of the grounds and even impose burdensome obligations on them, but such rights do not make the grounds any the less the grounds of that person’s residence.’ That must surely be correct, and it evidently influenced the FTT.
But the Averdiecks’ case concerned not a mere footpath running across the grounds but a roadway which ran along two sides of the property and served as access to a neighbouring farm and a small residential development. Ownership of the lane – which was 500m long and had even acquired a name – came with onerous maintenance obligations. The Averdiecks tried, unsuccessfully, to exclude it from their purchase of the property but had been told that it was part of the ‘package’.
The main argument put before the FTT was that the lane was used for a commercial purpose (namely, access to the farm) and that this robbed it of its status as ‘grounds’ of the house. The FTT rejected that, as it did the argument that the lane had no ‘functional use for the property’ (rightly, since that is not part of the statutory test).
Perhaps there would have been more chance of success if the case had been met head-on: that a roadway which does not cross your property but runs along the extreme edge of it and is separated from it by a fence, trees and established hedgerow is simply not, on ordinary use of language, part of your grounds. Would the man on the Clapham omnibus describe a farmer driving his tractor along the lane to reach his farmyard as ‘crossing the Averdiecks’ grounds’? Surely not.
We look forward with bated breath to an appeal to the Upper Tribunal.
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