Garden and Grounds: Four SDLT Rulings, and Why Letting Land Out Will Not Make It Mixed Use

Where the Line Now Sits

If a purchase includes land that is not residential property, the whole transaction is charged at the non-residential or mixed rates in Table B of section 55 Finance Act 2003 rather than the residential rates in Table A. On an expensive house that difference is large, which is why the question of what counts as the “garden or grounds” of a dwelling under section 116(1)(b) has become one of the most heavily litigated points in stamp duty.

Four decisions now carry 2026 citations, and the pattern in them is clearer than any single case. The one taxpayer win, Wood, turned on a public towpath carrying around 850 people a day through the property. The three losses include the two most recent, and both of those concerned the argument buyers ask about most often: the land is let out, worked or grazed by somebody else, so surely it is not part of the house.

Both tribunals said no. In Ferguson, a paddock used every day by a commercial livery yard under a grazing licence running back to 1989 was still part of the grounds of the house it sat inside. In Sinclair, a field grazed by a neighbouring farmer's sheep, shown as agricultural on DEFRA, Land Registry and planning maps, and left out of the council tax assessment altogether, was also still part of the grounds. The two panels were differently constituted, heard the cases six months apart, and reached the same answer for closely related reasons.

That matters more to a buyer than the towpath case does. Paddocks, fields, yards and grazing arrangements are ordinary features of country house purchases in a way that a National Trail running past the back door is not. For background on the classification itself, see our mixed-use property guide.

The Four Rulings at a Glance

Ferguson: A Let Paddock Is Still a Paddock

Andrew Charles Ferguson and Gemma Mary Ferguson v HMRC [2026] UKFTT 00238 (TC), decision number TC09782, was heard on 23 May 2025 by Tribunal Judge Malcolm Frost and Simon Bird, and released on 15 December 2025. Sean Randall of Sean Randall Tax LLP appeared for the buyers; Jacob Young for HMRC.

The property was Marden Grange, bought on 5 October 2022 for £4,250,000 in an off-market sale with no sales particulars. The single registered title ran to about 4.3 acres: an eight-bedroom house, roughly 3.9 acres of gardens and grounds, outbuildings, a swimming pool, a tennis court, and a paddock of about 0.4 acres. The buyers filed on 6 October 2022 on a mixed-use basis and paid £202,000. HMRC opened an enquiry twelve days later and issued a closure notice on 24 November 2023 increasing the SDLT by £219,250.

On the face of it the mixed-use case was strong. The paddock had been used since 1989 by a livery business trading as Marden Grange Livery Stables, whose operators leased adjoining stables from the vendors for around £13,000 a year and kept up to 12 horses. The paddock took up to three horses at a time and was in use every day. The licensees repaired the fencing, mowed, sprayed weeds and ran piped water from the stables to troughs on the land. The grazing licence fee was £480 a year.

The tribunal dismissed the appeal anyway. Three strands of reasoning did the work:

• The paddock could only be reached across the residential grounds. The livery operator's witness statement had said the paddock was “not accessible from Marden Grange”, but under questioning from the tribunal she clarified that access was in fact over the buyers' own land. At paragraph 50 the panel held that the absence of independent access from the stables “is inconsistent with the paddock having its own separate, self-standing function divorced from the house”.
• The licence did not bind the buyers. The property was sold with vacant possession. At paragraph 51 the tribunal held that as a matter of law the licence was not enforceable against the purchasers, who were under no obligation to let the horses stay. Third-party rights “may dilute amenity but do not, in and of themselves, change the character of land where those rights do not bind the new owner”.
• More than thirty years of commercial use gave the land no separate identity. At paragraph 52 the tribunal accepted the use was long-standing and commercial, and held it was outweighed by contiguity, residential-only access, the absence of any binding right, and the overall residential character and scale of the property.

The sentence most worth quoting is at paragraph 54: the paddock “is intended to be used, and is used, for grazing horses. This is the paradigm use of a paddock. The existence of a grazing licence and of extended use by a third party for that very purpose does not render the Paddock any less a part of the grounds of the Property.” The panel then endorsed the observation in Harjono v HMRC [2024] UKFTT 228 (TC) that “commercial” has become “a weasel word” in mixed-use arguments, and that inserting an agreement between a landowner and a third party does not, by itself, produce a use that carries weight.

One detail from the conveyancing is worth noting because it shows the point was live before completion. The 2017 grazing licence turned out not to cover the paddock at all, and a variation agreement adding it was executed on 4 October 2022, the day before completion. Clause 14 of the sale contract, headed “SDLT Enquiries”, required the sellers to obtain a statement from the licensees detailing “the occasional use of the paddock” and to produce a revised licence including it. Paperwork assembled to support a mixed-use position did not carry the argument.

Sinclair: Agricultural on Every Map, Still Grounds

Ian Sinclair and Diana Chilvers v HMRC [2026] UKFTT 00798 (TC), decision number TC 09898, was heard by remote video on 5 May 2026 by Tribunal Judge Bowler and Jane Shillaker, and released on 29 May 2026. Mr Sinclair appeared as a litigant in person; Fiona Man for HMRC.

The purchase completed on 22 March 2024 at £1,810,000. The sales brochure described “a fine Grade II listed farmhouse with over 3,000 square feet of accommodation and extensive outbuildings, in a picturesque location, set in over two acres of gardens and paddock”, in the South Downs. The land in dispute was a field of roughly one acre, enclosed by post-and-rail fencing, with small lanes running around the entire perimeter of the property so that the house, garden and field formed a single parcel. The return was filed three days after completion on a mixed-use basis with £80,000 paid. HMRC opened an enquiry on 1 November 2024 and issued a closure notice on 8 January 2025 for a further £48,450.

The grazing arrangement was genuine and long-running. A neighbouring farmer with a flock of between 600 and 800 sheep put six to twelve of them on the field from time to time, leaving them until the grass was down and then moving them on while it recovered. The arrangement began around 2012, and the tribunal treated it as having been in place for six years before the purchase. No money changed hands in either direction. The written agreement was undated and unsigned, and was only put in place after completion because Mr Sinclair was admitted to hospital the day before. Either side could end it on 30 days' notice, and it expressly created no relationship of landlord and tenant and no rights over the land.

What makes Sinclair the more useful of the two decisions is the strength of the official classification evidence, all of which pointed the taxpayer's way and none of which was enough:

• DEFRA's Magic Map, Pro Map, MapServe, the Valuation Office Agency, HM Land Registry and the local planning authority all showed the field as agricultural land.
• The Valuation Office confirmed the field was agricultural land, not subject to business rates, and not part of the council tax assessment of the house.
• The local planning officer confirmed the field “possesses a different character to what might be regarded as the garden to the Property”, that there was no planning history of it being lawfully used as garden land, and that in his professional opinion it was agricultural.

The tribunal accepted every word of that and dismissed the appeal. At paragraph 71 it held that the classification of the field as agricultural “for planning, council tax and cartography does not in itself determine whether the Field is ‘grounds’”, and at paragraph 72 that “Classification for planning does not determine the SDLT test”. The two systems ask different questions, and answering one does not answer the other.

On the grazing itself, the panel started from a candid position at paragraph 70: “Absent the grazing arrangement, there would therefore be little difficulty in concluding that the Field formed part of the grounds of the dwelling.” It then found the arrangement did not change that. The grazing was limited and intermittent and consistent with maintenance of the land. The buyers retained full access and control, could terminate on 30 days' notice, and were free to use the field themselves, for keeping animals or planting an orchard, even though in practice they never went into it. At paragraph 78 the tribunal concluded that the main purpose of the arrangement was to help the appellants maintain the field rather than to provide grazing for the sheep.

It borrowed the phrase “barter of convenience” from Modha v HMRC [2023] UKFTT 783 (TC) to describe the exchange of grazing for mowing, while being careful to add that the label “does not detract from the fact that the use of the Field is part of the farmer's commercial activities”. The conclusion at paragraph 84 was that the farmer's use “is not of such a nature or degree as to cause the Field to fall outside the term ‘grounds’”. The appeal was dismissed.

What the Two Grazing Cases Have in Common

Ferguson and Sinclair are not connected. Different panels, different animals, released five and a half months apart, and one set of appellants had specialist representation while the other ran his own case. Neither decision mentions the other. They land in the same place, and reading them together tells you more than either does alone.

Both panels applied the same checklist: the sixteen factors approved by the Upper Tribunal in HMRC v Suterwalla [2024] UKUT 00188 (TCC), drawn from 39 Fitzjohns Avenue Ltd v HMRC [2024] UKFTT 28 (TC). Within that exercise, four things decided both cases.

1. Whether the arrangement survives the sale. This is the strongest single signal in either decision. A licence that does not bind the buyer, or an informal arrangement terminable on a month's notice, leaves the buyer in full control of the land from day one. A tenancy or a lease that a purchaser takes subject to is a materially different case, and neither of these was that.
2. Whether the buyer keeps access and control. In Ferguson the paddock could not be reached except across the residential grounds. In Sinclair the buyers had a gate from their own driveway and no legal restriction on using the field, even though they never did. Land you can walk onto whenever you like is hard to describe as separate from your house.
3. Whether the use is simply the ordinary use of that land. Grazing horses is what a paddock is for. Sheep eating grass keeps a field down. Neither tribunal treated the ordinary use of the land as evidence of a separate function, and in Sinclair the panel went further and found the real purpose of the arrangement was maintenance.
4. Whether the land sits inside the plot. Ferguson: three sides of the paddock were surrounded by other parts of the property, with a simple post and rail fence that kept horses in without breaking the visual sweep of the grounds. Sinclair: lanes ran around the whole perimeter, so the house, garden and field were one identifiable parcel with a natural boundary.

The corollary is worth stating plainly, because it is the assumption these two cases dismantle. Being able to show that land is used commercially, that money changes hands, that the arrangement is decades old, that a professional adviser signed off the return, and that every official map and the council tax bill treat the land as agricultural, is not enough. All of that was present across these two appeals, and both failed.

Brzezicki: The Upper Tribunal Tightens the Test

HMRC v Christopher Brzezicki [2026] UKUT 00125 (TCC) was heard on 1 December 2025 by Judge Swami Raghavan and Judge Mark Baldwin, and released on 18 March 2026.

The property was a six-acre holding on the River Meon in Hampshire, bought on 3 July 2020, with a six-bedroom house converted from a former stable block. A man-made carrier stream roughly six feet wide ran between the garden and a two-acre parcel that the tribunal called the island, reached by two footbridges. The stream had been engineered for brown trout, with a sluice, a waterfall to oxygenate the water, a gravel spawning bed and downstream grilles. At completion it was not being run commercially, though it was still functioning biologically. Paying anglers came in a later season, after the purchase.

The First-tier Tribunal below had been split, and the mixed-use finding survived only on the judge's casting vote. The Upper Tribunal found errors of law, set that decision aside, and remade it. Its conclusion at paragraph 83 was that the stream and island were “undoubtedly part of the grounds”, so the land was entirely residential property and Table A applied.

Three points from the reasoning matter well beyond the facts of this case:

• An internal physical divide does not split a plot. At paragraph 70 the tribunal said that “the presence of a narrow watercourse does not operate to exclude the island from forming part of the garden or grounds”, noting that many residential properties contain streams, ponds, ditches or footpaths. The question is not whether water lies between two parts of land.
• Contiguity is about ownership, not physical features. The tribunal held the FTT was wrong to treat the stream as making the island non-contiguous, where all the land was in common ownership.
• Commercial use is not decisive. This is the point most often reported backwards. The tribunal did not hold that the absence of commercial trout production saved the claim for HMRC. It went further, saying at paragraph 45 that “even if it were established that there had been some historical (or even current) commercial use, that would not force a conclusion that the land could not be grounds”, and at paragraph 77 describing the contrary view as a “flawed assumption”.

That third point is the opposite of the way these cases are often summarised. If you have read that Brzezicki turned on there being no commercial activity, and inferred that commercial activity would have won, the tribunal expressly rejected that reasoning.

Wood: A Towpath Win, and Its Limits

Alan Wood & Anor v HMRC [2026] UKFTT 00265 (TC), case reference TC09791, was heard on 28 January 2026 by Judge Brooks and Member Hunter, and released on 20 February 2026. The second appellant was Elizabeth Veitch.

Mr Wood and Ms Veitch bought a freehold estate in Marlow for £4.5 million, completing on 29 June 2023. It comprised a seven-bedroom house, a garden about 7 metres deep enclosed by a brick wall roughly 1.3 metres high with a single gate, a towpath about 3 metres wide forming part of the Thames Path National Trail, a low chain fence, and a strip of grass on the river bank. They self-assessed and paid £586,250. Their accountants then amended the return on the basis that the towpath was non-residential, stating that the correct liability was £214,500 and that a refund of £371,750 was due.

The tribunal agreed that the towpath was not part of the grounds, and allowed the appeal. What carried it was the sheer volume of use. Mr Wood had set up a video camera on the first floor of the house, recorded the towpath between 6am and 9pm on five days in late May and early June 2025, sampled fifteen minutes at random within each hour, and counted. The resulting average was about 850 users a day.

Three qualifications belong with that result, and they are usually omitted:

• A public right of way alone was expressly not enough. At paragraph 34 the tribunal recorded that a public right of way “does not make it any less the grounds of the House”, and that counsel for the buyers accepted this “as he must”. The case turned on the level of intrusion together with the loss of privacy and security. No threshold number of users was set.
• The 850 figure was unchallenged rather than established. It was the first appellant's own sampling, and HMRC did not contest it. The panel recorded that because the conclusions were not challenged, it did not consider it necessary to view the footage.
• The riverside finding is obiter. Having decided the towpath point, the tribunal said at paragraph 36 that it was “not necessary” to decide whether the riverside strip was part of the grounds, and set out an abbreviated view only because it had heard argument. At paragraph 37 it said it “would have concluded” the riverside was part of the grounds. That is not a finding, and it should not be cited as one.

It is also worth being precise about what the tribunal did and did not order. It allowed the appeal. It did not compute or award a refund. The £214,500 and £371,750 are the figures stated in the accountants' amendment letter and recorded in the findings of fact; the reduction follows mechanically from the appeal succeeding.

Why Brzezicki Outweighs Wood

These two decisions are not equal and opposite. Three things separate them.

The chronology matters more than it first appears. Brzezicki was released 26 days after Wood, so the Wood panel decided without it and never addressed it. Wood was argued on the earlier Upper Tribunal authority alone. Any future panel hearing a similar argument will have to apply Brzezicki, which no one has yet tested against a towpath.

Nor do the two cases meet head on. Brzezicki concerned a private stream and island with no public access. It contains one passing observation about a public path, and it cuts against the taxpayer: the tribunal envisaged land separated from a dwelling by a public path in someone else's ownership that “may still fairly be described as grounds of the dwelling”. So there is no Upper Tribunal authority that a busy public towpath is non-residential, and there is Upper Tribunal authority that third-party rights over land do not by themselves take it out of the grounds.

Ferguson and Sinclair do not change that hierarchy. Both are First-tier decisions and neither binds anything. What they add is weight of consistent application: two more panels, working from the same Upper Tribunal checklist, reaching the same answer on the fact pattern that turns up most often in real purchases. Wood now looks less like one half of a coin toss and more like a single outlier that succeeded on an unusual and carefully evidenced fact, around 850 people a day walking through the property, which HMRC chose not to contest.

The Refund You Can Lose by Claiming

The most useful detail in either case is one that almost no coverage mentions, and it is a cost of losing rather than a benefit of winning.

Mr Brzezicki had paid the additional-dwellings surcharge because he still owned his previous home. He then sold that home within the window that would normally have entitled him to reclaim the surcharge. According to the First-tier decision, he was not able to reclaim it, because he had amended his SDLT return to claim the reduced rate applicable to non-residential property. Having chosen the mixed-use route, he lost the mixed-use argument on appeal and appears to have been shut out of a surcharge refund he would otherwise have had.

A speculative mixed-use amendment is therefore not a free option. It can interact with other reliefs you were already entitled to. If you are in the surcharge-refund window, see our refund claim process guide before amending anything.

What This Means If You Are Considering a Claim

Wood is a genuine win and worth knowing about. It is not a green light. Reading it as “my property has a footpath, so I can claim” misreads the case in the specific way the tribunal warned against.

• The existence of a right of way, a track, a paddock boundary or a stream is not by itself an argument. All four decisions say so.
• A grazing licence or a let paddock is the weakest version of the claim, not the strongest. Ferguson said in terms that where the licence is the sole basis for the claim, a taxpayer should think very carefully about whether it has any merit at all.
• Agricultural classification is not the answer to a stamp duty question. Sinclair had DEFRA, the Valuation Office, the Land Registry and the local planning officer on his side, no council tax on the field and no business rates, and still lost.
• The exercise is evaluative and fact-specific. Brzezicki weighed a list of factors and reached an overall impression; it did not apply a checklist that a property either passes or fails.
• Evidence carries the argument. Wood succeeded on measured, documented, contemporaneous evidence of intrusion that HMRC chose not to contest. Assertion would not have done it.
• The direction of travel at the binding level favours HMRC. Brzezicki set aside a taxpayer win and narrowed the routes to a mixed-use finding, and the two decisions since have followed it in substance.
• Professional representation is not a proxy for a strong case. The Ferguson appellants were represented by a specialist SDLT adviser and lost; the Sinclair appellant ran his own case and lost. The facts decide these appeals.
• Losing has costs beyond the fee. Interest and penalties can follow an unsuccessful claim, and as Brzezicki shows, an amendment can forfeit a separate relief.

If your purchase includes a paddock, a field or a yard that someone else uses, the useful question is not whether the use is commercial. It is whether that use survives your purchase and takes the land out of your control. A grazing licence you can end on a month's notice, or one that does not bind you at all, leaves you owning a field next to your house. That is what both tribunals concluded.

The Law Society has separately warned that some firms continue to encourage buyers to make unfounded SDLT refund claims. Where a claim is genuinely arguable it is worth taking properly, and where it is not, an amendment is an invitation to an enquiry.

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