HMRC Never Saw the House. 12 Acres of Woods Won a £225,250 Stamp Duty Appeal. Would It Win Now?

The House, the Woods and the £225,250

Marie Guerlain-Desai bought Durford House, on the private Durford Wood estate near Petersfield, on 15 January 2021 for £3,160,000. The decision describes a six-bedroom house set in 16.6 acres, with a triple garage, outbuildings, about 4 acres of private formal gardens and about 12 acres of mature woodland at the rear (paras 4, 6 and 7). The woods wrap around the garden on every side but the north, and run up to National Trust woodland to the east (paras 22 and 23).

The estate is unusual. It was conceived in 1923, when about 300 acres of woodland were laid out for 30 houses, and in 1959 residents bought about 30 acres of woodland, of which these 12 acres form part (paras 37, 38 and 146). Her property is subject to a charge in favour of the estate's management company, and she is obliged to maintain the woods (para 42).

Her return, filed on 18 January 2021, used the higher rates for additional dwellings and showed £372,750 (para 7). On 1 April 2021 her agent, Cornerstone Tax, amended it on the basis that the purchase included non-residential property, and asked for £225,250 back plus interest (para 8). HMRC opened an enquiry on 13 December 2021 and on 25 February 2022 issued a closure notice restoring the full £372,750 (paras 9 and 12).

Our working reproduces both of the decision's figures. The residential column uses the temporary nil-rate band of £500,000 in force from 8 July 2020 to 30 June 2021, plus the 3% surcharge for additional dwellings. The difference is the £225,250 in dispute.

The stakes would be higher on the same price today. Under the residential bands in force since 1 April 2025, £3,160,000 attracts £292,950, or £450,950 with the 5% surcharge (5% on the first £125,000, 7% on the next £125,000, 10% on the next £675,000, 15% on the next £575,000 and 17% on the remaining £1,660,000). The mixed-use figure is unchanged at £147,500. See our stamp duty rates 2026 for the full tables.

Why the Woods Were Not Grounds

Under section 116(1)(b) of the Finance Act 2003, residential property includes land that “is or forms part of the garden or grounds” of a dwelling. If a purchase includes any land that is not, the whole price is taxed at the lower non-residential rates in Table B of section 55. HMRC accepted that the house was a dwelling and the 4 acres were its garden (paras 75 and 76). The only question was the woods (para 77).

The tribunal found four things against them being grounds:

• The public used them. They were not fenced or gated in a way that would deter anyone (para 147), and “the reality is that the woods are treated as public woodland with unrestricted access to the public, including dog walkers and cyclists” (para 150). The tribunal found “a considerable level of intrusion” (para 142).
• The garden was screened off from them. Over many years the owners had fenced the garden and grown a mature screen of trees and bushes. So the woods gave the house no privacy or security (paras 148 and 153), and there was “not a view, let alone a treasured view” of the house from the woods (para 149).
• They were not what the house was sold on. The tribunal was “not persuaded the woods were a key selling point nor essential to the dwelling house and private garden's character” (para 155).
• They did nothing for the house. Following Sloss v Revenue Scotland [2021] FTSTC 1, a Scottish LBTT case, the tribunal said there must be a link “beyond the fact that they were purchased together in a single transaction” and that the woods must have “a functional purpose for a house of the size of the dwelling house” (para 158). Its conclusion at para 160: “The tribunal did not consider that the woods have, in these terms, a functional purpose for, or a use that supports, the dwelling.”

Two points are easy to miss. There was no commercial use: the tribunal found no use of the woods separate from the house “other than the fact it had become a wooded area with public access” (para 140). And the panel distinguished the earlier decisions it was shown on facts it called exceptional, including the estate's 1923 origins, the 1959 purchase and “its untypical ownership and management arrangements” (para 162).

A Credible Witness and No Site Visit

The appeal was heard by video on 9 May 2024 by Tribunal Judge Ruthven Gemmell WS and Tribunal Member Jane Shillaker. Patrick Cannon of counsel, instructed by Cornerstone Tax, appeared for the buyer, and Maria Spalding of HMRC's Solicitor's Office for HMRC.

The buyer gave evidence and “was a credible witness” (para 20). On HMRC's side, “no one from HMRC had visited or had actually seen the Property” (para 21). HMRC's case described the woods as visible from the house, providing “a treasured view to the dwelling”, lacking “any features which would separate the land”, and giving privacy and security from users of nearby footpaths (para 137).

The tribunal said those statements “were in complete contradiction to the evidence” of the buyer, who lived there, and “treated HMRC's submissions on these matters with caution” (para 138). Her evidence went further than the photographs. She called the Knight Frank sales brochure “deceptive”: it advertised views to the South Downs that could not be seen from the house and needed a 10-minute walk to the boundary (paras 33 and 34).

Does the Ruling Still Hold in 2026?

As at 3 October 2026, Find Case Law holds no Upper Tribunal decision naming Ms Guerlain-Desai, and no later published decision cites the June 2024 ruling. The two later decisions that mention her name cite only the 2023 late-appeal decision. Applications for permission to appeal are not always published, so that is not proof that no appeal was sought. Either way, a First-tier decision binds no other tribunal.

Brzezicki is the decision that matters most. The First-tier Tribunal below had found that the island was “not essential to the character of the house or its sense of space” and that the house's privacy and outlook did not depend on it. The Upper Tribunal held that “there is no requirement that all parts of grounds be necessary to the enjoyment of the dwelling”, so none of that helped the taxpayer (para 80). It treated the fact that the house's privacy and views did not depend on the land as “only one quite minor factor” (paras 81 and 83).

In our reading, that cuts against three of the four strands in the woodland ruling: no privacy, not essential to character, no functional purpose. What survives is the first strand, heavy public use, which is the same kind of reasoning that won Wood. Even there, Wood was decided before Brzezicki, and the Wood tribunal accepted that a public right of way on its own does not stop land being grounds (para 34). One detail shows how fact-driven these cases are: Jane Shillaker, the member who sat on the woodland appeal, also sat on Sinclair, which HMRC won.

For the facts and reasoning of the four 2026 decisions, see SDLT garden and grounds: the 2026 tribunal rulings.

Buying a House With Woodland or Large Grounds

Size alone will not make a purchase mixed use. In Hyman v HMRC [2022] EWCA Civ 185 the Court of Appeal was asked whether there is an “objective quantitative limit on the extent of the garden or grounds”, and Lewison LJ answered: “The suggested qualification is not there” (paras 1 and 33). Twelve acres did not decide this case on its own. Public use, physical separation and the estate's unusual history weighed with the tribunal, alongside the size of the woods relative to the house and garden (para 162).

Woodland next to a house has often been held to be grounds. In The How Development 1 Ltd v HMRC [2023] UKUT 00084 (TCC) the Upper Tribunal held that woodland, though hard to reach, was part of the grounds, pointing to the privacy and security it gave (paras 125 and 126). In Michael v HMRC [2024] UKFTT 00301 (TC), released on 2 April 2024, 3.4 acres of woodland behind a half-acre garden were held to be grounds, the tribunal finding among other things that they gave the house a degree of security and privacy (paras 16 and 52). The same counsel and agent acted in Michael, about ten weeks before the woodland decision, and lost.

If your purchase includes woods, these are the questions the tribunals have asked:

• Do the woods give the house privacy, security, a setting or a view? If yes, they are likely to be grounds.
• Are they used by other people in practice, and can you prove it with photographs, records or witnesses rather than assertion?
• Is there a physical break, such as a fence or established screen, between the garden and the woods?
• How were they marketed, and does the brochure match what is actually there?

Woodland bought on its own is a different matter: see Woodland & Forestry Stamp Duty. For how mixed-use classification works in general, see Mixed-Use Property SDLT, and before amending a return, read Stamp Duty Refund: Can You Claim It Back?

A failed claim has a cost. If HMRC has already refunded the tax, it is due again with late-payment interest, currently 7.75% a year (Bank of England base rate plus 4 percentage points), and penalties can arise where a return is found to be inaccurate.

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