Alan Wood & Anor v The Commissioners for HMRC

Introduction

1. The Appellants, Alan Wood and Elizabeth Veitch, appeal against closure notices issued by the Respondents (“ HMRC ”) on 17 September 2024 (the “ Closure Notices ”). These had concluded that the Stamp Duty Land Tax Return (the “ Return ”) filed by Mr Wood and Ms Veitch on 30 June 2023 did not require any amendment and, as such, they were not entitled the refund of Stamp Duty Land Tax (“ SDLT ”) that they had claimed by way of an amendment to the Return.

2. Edward Hellier of counsel appeared for Mr Wood and Ms Veitch. HMRC were represented by Gemma Truelove a litigator of HMRC’s Solicitor’s Office. Their helpful submissions, both written and oral, were much appreciated and have been taken into account, as have all of the materials and authorities to which we were referred, even if not specifically mentioned in this decision.

3. We have adopted the following terms, as used by the parties in their skeleton arguments and at the hearing: (1) The “ Property ” – a freehold estate in Marlow which was jointly purchased by Mr Wood and Ms Veitch for £4.5m on 29 June 2023. The Property includes the House, the Garden, the Wall, the Gate, the Towpath, the Chain Fence and the Riverside but not the Jetty. (2) the “ House ” – is described in an estate agents brochure as: “… a seven-bedroom family home on the River Thames, situated within the Marlow Conservation area, on the picturesque Northern Embankment by the Marlow Suspension Bridge, … The house sits looking South with unparalleled and unrestricted views of the meandering River in both directions, complete with its own private mooring.” The House is a three-storey dwelling with three bathrooms with vehicular access to the north via a road. To the south, on the first floor overlooking the Thames, is a large balcony/terrace and at ground level, an area of patio and lawn (the “ Garden ”). The Garden, which is approximately 7m deep from the back of the house and approximately 15m wide, is enclosed by a brick wall which is approximately 1.3 metres in height (the “ Wall ”). Looking from the House, on the far left of the Wall is a single gate (the “ Gate ”) which provides pedestrian access between the Garden and the Towpath. (3) the “ Towpath ” – is a busy section of a busy public right of way which forms part of the Thames Path, a 185 mile National Trail running from the source of the Thames in the Cotswolds to Woolwich. The Towpath runs the width of the Property. It is around 3 metres wide and is gravelled with some parts having an asphalt or concrete base. The Wall is on one side of the Towpath. On the other side of the Towpath is a chain link fence (the “ Chain Fence ”) which separates the Towpath from the Riverside. The Chain Fence is approximately 25cm off the ground and has a small “private property” sign hanging from it which refers to the section of the Riverside included in the Property being private and, unlike the Towpath, not an area over which the general public has a right of way. (4) the “ Riverside ” – is a section of grass on the bank of the River Thames. On one side, separating it from the Towpath, is the Chain Fence. On the other side is the River Thames. Next to the Riverside, on the river, is a jetty (the “ Jetty ”), a private mooring for use by the owners of the Property. The Jetty is not, and does not form , any part of the Property.

4. The Appendix contains a photograph of the Property showing the House (the middle building), Garden, Wall, Gate, Towpath, Chain Fence, Riverside and Jetty (with a boat moored to it). Statutory Framework

5. The legislative framework for SDLT is largely contained in the Finance Act 2003 . Unless otherwise stated, all subsequent references to sections, schedules and paragraphs are to the sections, schedules and paragraphs in the schedules of that Act .

6. Section 49 provides that SDLT is a tax on “chargeable transactions”. A “chargeable transaction” is a “land transaction” which is not exempt (see s 49(1)) and a “land transaction” is “any acquisition of a chargeable interest” (see s 43(1)). A “chargeable interest” is defined in s 48(1) as “an estate, interest, right or power in or over land in England or Northern Ireland.” The “effective date for a land transaction” is the date of completion (see s 119(1)(a)).

7. Section 76 requires the purchaser, in the case of a “notifiable transaction”, to deliver a land transaction return (ie an SDLT return) within 14 days of the transaction. That return must include a self-assessment of the SDLT chargeable on the basis of the information in the return. A “notifiable transaction” is defined in s 77 as an acquisition of a “major interest in land” (ie an estate in fee simple absolute see s 117) that does not fall within one of the exceptions in s 77A.

8. Schedule 10 has effect with respect to land transaction returns, assessments and related matters (see s 78).

9. Under paragraph 6, a purchaser may, within 12 months of filing, amend a return by giving notice to HMRC. HMRC may enquire into a return, under paragraph 12, by giving notice to a purchaser within nine months of an amendment being made. Such an enquiry is completed when HMRC issue a closure notice stating either than no amendment of the return is required or by making an amendment of the return to give effect to their conclusion (see paragraph 23).

10. Section 55 (insofar as applicable) provides: 55 Amount of tax chargeable: general (1) The amount of tax chargeable in respect of a chargeable transaction to which this section applies is determined in accordance with subsections (1B) and (1C). … (1B) If the transaction is not one of a number of linked transactions, the amount of tax chargeable is determined as follows— Step 1 Apply the rates specified in the second column of the appropriate table below to the parts of the relevant consideration specified in the first column of the appropriate table. “The “appropriate table” is— (a) Table A, if the relevant land consists entirely of residential property, and (b) Table B, if the relevant land consists of or includes land that is not residential property. Step 2 Add together the amounts calculated at Step 1 (if there are two or more such amounts). … TABLE A: RESIDENTIAL Part of relevant consideration Rate So much as does not exceed £125,000 0% So much as exceeds £125,000 but does not exceed £250,000 2% So much as exceeds £250,000 but does not exceed £925,000 5% So much as exceeds £925,000 but does not exceed £1,500,000 10% The remainder (if any) 12% TABLE B: NON-RESIDENTIAL OR MIXED Relevant consideration Percentage So much as does not exceed £150,000 0% So much as exceeds £150,000 but does not exceed £250,000 2% The remainder (if any) 5% … (3) For the purposes of subsection (1B) — (a) the relevant land is the land an interest in which is the main subject-matter of the transaction, and (b) the relevant consideration is the chargeable consideration for the transaction …

11. The terms “residential” and “non-residential” property are defined in s 116 which, insofar as applicable in the present case, provides: 116 Meaning of “residential property” (1) In this Part “residential property” means— (a) a building that is used or suitable for use as a dwelling, or is in the process of being constructed or adapted for such use, and (b) land that is or forms part of the garden or grounds of a building within paragraph (a) (including any building or structure on such land), or (c) an interest in or right over land that subsists for the benefit of a building within paragraph (a) or of land within paragraph (b); and “non-residential property” means any property that is not residential property. …

12. Paragraph 35(1)(b) of schedule 10 provides that an appeal may be brought against a conclusion stated by a closure notice.

13. Where such an appeal is notified to the Tribunal, paragraph 42(2) of schedule 10 provides: If, …, the tribunal decides— (a) that the appellant is overcharged by a self-assessment; … the assessment shall be reduced accordingly, but otherwise the assessment shall stand good. Evidence and Facts Evidence

14. In addition to a bundle comprising 195 pages we heard from Mr Wood. We found him to be a credible, straightforward and helpful witness. Although he had exhibited video evidence (as described below) to his witness statement, as the conclusions he had drawn from it were not challenged, we did not consider it necessary to view that evidence.

15. It is on the basis of the evidence that we make our following findings of fact. Findings of Fact

16. On 29 June 2023 Mr Wood and Ms Veitch jointly purchased the Property for £4.5m. They filed the Return on 30 June 2023 in which they declared that the Property was residential (specifically that it was an additional residential property). SDLT of £586,250 as shown on the Return was paid to HMRC.

17. On 16 November 2023, their accountants, Landstar Accountancy Limited (“ Landstar ”), wrote to HMRC to amend the Return (under paragraph 6 of schedule 10) on the basis that the Property was made up of both residential and non-residential land; the House, garden and Riverside (which serves as “additional amenity land to the dwelling”) being residential and the Towpath being non-residential. The letter stated that the lower, non-residential or mixed-use rate of SDLT should apply and that, on such a basis, liability for SDLT was £214,500 and therefore a SDLT refund of £371,750 was due.

18. HMRC issued Mr Wood and Ms Veitch with formal notices of enquiry into the Return (under paragraph 12 of schedule 10) on 6 August 2024. That enquiry concluded with the issue of the Closure Notices on 17 September 2024 and HMRC’s decision that no amendment was required and no refund due.

19. On 15 October 2024 Mr Wood and Ms Veitch appealed to HMRC against the Closure Notices. On the same day, they notified their appeals to the Tribunal.

20. On 10 November 2025 HMRC made an application to the Tribunal to amend the statement of case to include a new argument that, in addition to being ‘residential property’ under s 116(1)(b), the Towpath and Riverside also were ‘residential property’ by virtue of s 116(1)(c), ie being “an interest in or right over land that subsists for the benefit of a the building within paragraph (a) or of land within paragraph (b)” of s 116(1).

21. By application to the Tribunal of 3 December 2025, further and better particulars of this new argument were sought by Landstar. The application explained that: “… the Taxpayers do not understand HMRC’s case on s116(1)(c) (ie their proposed new argument). In particular, it is unclear: what HMRC say is the interest/right that the Taxpayers had; whether HMRC are suggesting that such an interest/right is separate from their interest in the dwelling and its gardens; and how, as a matter of fact, that interest/right subsists for the benefit of the dwelling. Further, it is unclear whether HMRC’s s 116(1)(c) argument pertains to the footpath and land abutting the river together, or to each individually. In order for the Taxpayers to know what case they must meet (and so whether they can consent to the Application or would have to file further evidence) HMRC should clarify these points.”

22. HMRC provided further and better particulars on 5 December 2025 which confirmed that it was their case that the interest/right that Mr Wood and Ms Veitch had in the Towpath and Riverside “is the same interest/right that the Appellants have over the whole plot of land.”

23. In preparation for this appeal, and to provide the Tribunal with an accurate sense of its use, Mr Wood set up a video camera on the first floor of the House pointing towards the Towpath.

24. The camera recorded the Towpath between 6am and 9pm on Monday 26 May 2025 (a Bank Holiday); Wednesday 28 May 2025; Friday 30 May 2025; Saturday 31 May 2025; and Sunday 1 June 2025. Rather than watch the entire 75 hours recorded, Mr Wood selected, at random, 15 minutes within each hour on each day (with a different 15 minutes each day) and counted the use of the Towpath in each 15 minute period which he recorded in a spreadsheet.

25. His conclusions, which were not challenged, showed that on average the Towpath was used by 850 people every day (comprising individuals, families, dog walkers, cyclists and joggers). Mr Wood’s evidence (which was also not challenged) was that this was fairly representative of use of the Towpath throughout the year although it was busier on the weekends and in the summer but less so during the week and in the winter.

26. Given such use, Mr Wood and Ms Veitch are not able to sit or relax on the Towpath nor are they able to leave anything on it that might either block, obstruct or interfere with the public right of way and cannot change its character or appearance. They do not leave anything unattended or unsecured on the Towpath that could easily be taken and they do not use it as part of the Garden or let their grandchildren play on it.

27. In terms of security and privacy, as Mr Wood agreed in evidence, the House being next to the Towpath, a busy public right of way, was comparable to a property/dwelling on a busy street or other public space.

28. Other than on one or two occasions, when he had to eject individuals posting Instagram images of themselves on a boat moored at the Jetty, as Mr Wood confirmed, the “private property” sign on the Chain Fence was largely respected and the users of the Towpath public footpath did not stray onto the Riverside. Although due to its location there is a lack of security and privacy, unlike the Towpath, and as Mr Wood accepted in evidence, there is nothing to prevent the occupier of the Property from altering the appearance, nature or character of the Riverside, eg erecting a different type of fence emphasising its separation from the Towpath and/or replacing the grass with a paved patio (like that of the neighbouring property shown to the right of the photograph in the Appendix). Discussion

29. It is common ground that the House is a “building” within s 116(1)(a) and the Garden is a “garden” within s 116(1)(b). However, the parties part company on whether the Property is entirely “residential property”, in particular: (1) Whether the Towpath and/or Riverside form part of the grounds of the House (s 116(1)(b)); and/or (2) Whether the interest in/right over the Towpath and/or Riverside held by Mr Wood and Ms Veitch subsists for the benefit of the House or of the garden or grounds of the House (s 116(1)(c)).

30. Mr Hellier, for Mr Wood and Ms Veitch, contends that the Towpath and Riverside are not residential property as they are not “land that is or forms part of the garden or grounds” of the House for the purposes of s 116(1)(b) and/or their freehold estate of the Property (including the Towpath/Riverside) does not constitute “an interest in or right over land that subsists for the benefit of” the House for the purposes of s 116(1)(c).

31. For HMRC, Ms Truelove contends that the Property was entirely residential at the time of completion by virtue of s 116(1)(b) and/or s 116(1)(c).

32. In HMRC v Suterwalla [2024] UKUT 188 (TC) (“ Suterwalla ”), at [12] – [17], the Upper Tribunal (Judges Sinfield and Greenbank) cited several authorities in which s 116 and the issue of mixed residential and non-residential property had arisen. At [18], the Upper Tribunal, having referred to the nine ‘pointers’ to be taken into account when considering whether land forms part of the grounds of a building (as listed by Judge Baldwin in James Faiers v HMRC [2023] UKFTT 00297 (TC) and adopted by the First-tier Tribunal in that case), the Upper Tribunal continued: “… Although Judge Baldwin’s formulation is helpful, we prefer the expanded summary of the relevant factors, derived from the cases including Hyman , Faiers and How Development , by Judge McKeever in 39 Fitzjohns Avenue Ltd v HMRC [2024] UKFTT 28 (TC) at [37]: “(1) Grounds is an ordinary English word. (2) HMRC’s SDLT manual is a fair and balanced starting point (considering historic and future use, layout, proximity to the dwelling, extent, and legal factors/constraints). (3) Each case must be considered separately in the light of its own factors and the weight which should be attached to those factors in the particular case. (4) There must be a connection between the garden or grounds and the dwelling; (5) Common ownership is a necessary condition, but not a sufficient one; (6) Contiguity is important, grounds should be adjacent to or surround the dwelling; (7) It is not necessary that the garden or grounds be needed for ‘reasonable enjoyment’ of the dwelling having regard to its size and nature; (8) Land will not form part of the ‘grounds’ of a dwelling if it is used or occupied for a purpose separate from and unconnected with the dwelling; (9) Other people having rights over the land does not necessarily stop the land constituting grounds. This is so even where the rights of others impinge on the owners’ enjoyment of the grounds and even where those rights impose burdensome obligations on the owner; (10) Some level of intrusion onto (or alternative use of) an area of land will be tolerated before the land in question no longer forms part of the grounds of a dwelling. There is a spectrum of intrusion/use ranging from rights of way (still generally grounds) to the use of a large tract of land, historically in separate ownership used by a third party for agricultural purposes under legal rights to do so (not generally grounds); (11) Accessibility is a relevant factor, but it is not necessary that the land be accessible from the dwelling. Land can be inaccessible and there is no requirement for land to be easily traversable or walkable; (12) Privacy and security are relevant factors; (13) The completion of the initial return by the solicitor on the basis the transaction was for residential property is irrelevant; (14) The land may perform a passive as well as an active function and still remain grounds; (15) A right of way may impinge an owner’s enjoyment of the grounds or even impose burdensome obligations, but such rights do not make the grounds any less the grounds of that person’s residence; and (16) Land does not cease to be residential property, merely because the occupier of a dwelling could do without it.””

33. Both Mr Hellier and Ms Truelove referred to the above “expanded summary of relevant factors” with each emphasising those factors that most supported their cases. Although they both cited various additional authorities there was agreement that, as recognised at Suterwalla [18(3)], each case was to be considered on its own merits, in the light of its own factors and the weight to be attached to those factors. As such, previous decisions of the Tribunal, although illustrative of how the issue of mixed residential/non-residential was approached in that particular case, provide only limited assistance in the present case.

34. Having regard to the subsequent applicable Suterwalla factors in relation to the present case, we note that there is a connection between the House, Towpath and Riverside and that these are in common ownership and are contiguous. As it is a public right of way, other people clearly have rights over the Towpath. However, this in itself, as the Upper Tribunal observed in Suterwalla , does not make it any less the grounds of the House. Mr Hellier accepts, as he must, that this is the case but contends that it is the level of intrusion – with some 850 people using the Towpath each day – rather than it being a public footpath, together with the lack of privacy and security, that takes it outside s 116(1)(b).

35. On balance, taking account of the Suterwalla factors, we agree. In doing so we also note the use of the Towpath is separate from and unconnected with the House and Garden from which it is separated by the Wall (as is clear from the photograph in the Appendix).

36. Having concluded that the Towpath does not form part of the grounds of the House, it follows that the Property does not consist entirely of residential property and therefore the appeal succeeds. As such, it is not necessary for us to consider whether the Riverside also forms part of the grounds of the House or if the interest in/right over the Towpath and/or Riverside held by Mr Wood and Ms Veitch subsists for the benefit of the House or of the garden or grounds of the House (s 116(1)(c)). However, having heard argument, we have briefly set out our conclusions on these issues rather than address them in full as we would have done had we come to a different conclusion in relation to the Towpath.

37. We consider that the Riverside, despite a lack of privacy and security, is for the sole use of the House with very little intrusion by the public. Unlike the Towpath it would be possible for the occupants of the House to sit or relax on the Riverside. It is also possible, as in the case of the neighbouring property, to alter its appearance and character. As such, taking into account the Suterwalla factors we would have concluded that, on balance, the Riverside is part of the grounds of the House.

38. With regard to s 116(1)(c), we agree with Mr Hellier that s 116(1)(c) cannot apply to either the Towpath or the Riverside because there is a single freehold estate of the Property and that single estate is not an interest that can subsist for the benefit of itself. Decision

39. Therefore, for the reasons above the appeal is allowed Right to apply for permission to appeal

40. This document contains full findings of fact and reasons for the decision. Any party dissatisfied with this decision has a right to apply for permission to appeal against it pursuant to Rule 39 of the Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009. The application must be received by this Tribunal not later than 56 days after this decision is sent to that party. The parties are referred to “Guidance to accompany a Decision from the First-tier Tribunal (Tax Chamber)” which accompanies and forms part of this decision notice. Release date: 20 th FEBRUARY 2026