“Durford Wood sits in the South Downs National Park and “despite the 35 properties nestling within its perimeter, retains its wholly rural character and appearance. The Wood is an important habitat for wildlife and makes an immense contribution to the natural beauty of the landscape. Many of the original houses in the Wood were designed by a well-known local architect and have common style, features and internal layout……National parks have common cause, existing to conserve and enhance the natural beauty of the areas they span, maintain their tranquil character, wildlife and cultural heritage.”
“The idea of Durford Wood Estate was conceived in 1923 and at the time of its formation it was a unique concept. The Legge family decide to develop and area of some 300 acres of woodland, building a substantial road and water supply system to serve 30 houses. Each property, some with their own service cottage, was situated in an average of 10 acres, ample space to enjoy the benefits of a secluded and peaceful country life in surroundings of great natural beauty.”
“In 1959 the residents thought ahead and decided to secure additional long term protection for the Estate by purchasing some 30 acres of woodland between the Upper and Lower Woods. They achieved this by subscription to debentures in the management company. Today’s residents benefit from their farsightedness and inherit the right to walk this land. It is a fine legacy.”
“Public footpaths are clearly marked…. The informal footpaths in the Residents’ Wood are for the exclusive use of residents, their family and friends.”
“(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.”
“In my view “grounds” has, and is intended to have, a wide meaning. It is an ordinary word and its ordinary meaning is land attached to or surrounding a house which is occupied with the house and is available to the owners of the house for them to use. I use the expression “occupied with the house” to mean that the land is available to the owners to use as they wish. It does not imply a requirement for active use.”
“a secluded location, tucked away from the main road, within the exclusive Durford Wood Estate that was initially established in the late 1920s and consists of individually built country houses in extensive and mature woodlands and grounds.”
“135. The Tribunal also considered that the Woodland Trust land does not function as an appendage but has a self-standing function". 136. The Tribunal does not accept that because there is a contribution to the cost of maintenance rather than a monetary consideration payable this fails to meet the test of a commercial purpose. Even if it does, the Tribunal consider that it has a self-standing function and accordingly should not be classified as residential property. This self-standing function and separate use is improving the environment and rewilding under strict and controlled conditions and obligations. 137. The agreement with the Woodland Trust requires the trust to pay no more than 50% of the cost of agreed works and 50% of the cost of their maintenance work. The Trust commits itself to make payment of no more than£2700 plus VAT for their contribution to the works. GW at no time receives any cash payment from the trust. 138. Similar to GW's arrangement with the farmer in relation to the grazing land, he receives a commercial benefit to the extent that he does not need to pay 100% of the costs of maintenance. 139. The aim of the agreement is to ensure that at least 80% of the trees planted are established well within usual forestry standards. GW is required to allow unfettered access to the site by workmen, agents and invitees of the trust and he is specifically prohibited from carrying out any activities which would lead to loss of or damage to the works. 140. GW is required to control rabbits and other pests and not to allow any grazing of stock.”
“68. So, Judge McKeever recognises that the use to which land is put is simply one factor which must be weighed up when considering whether that land comprises grounds. 69. Secondly (as recognized by Judge McKeever) on the authority of How, we must consider all the facts and circumstances and undertake an evaluative exercise. The fact that a piece of land might be used “commercially” is not decisive, and merely something that needs to be weighed in the balance. 70. Recent cases (including those cited in this decision but there are others) show that taxpayers and their representatives are increasingly equating commercial use with mixed use . And that one needs to go no further than finding some form of commercial use of land to take it outside the entirely residential criterion. We think this is misconceived.” 71. When considering the use to which land is put (a relevant but not conclusive) factor, it is our view that the weight given to that use is largely determined by the ultimate use of that land, and not by any “intermediate” use.”
“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. This is subject to the rule in subsection (7) in the case of a transaction involving six or more dwellings.”
“ We have adopted the approach suggested in Hyman UT and endorsed by the Court of Appeal in Hyman of weighing up all material factors, based on the FTT’s relevant findings of fact.”
“The principles on the identification of “garden or grounds” to be derived from the cases are helpfully set out in the recent case of Faiers, the Tribunal said, at [44]: “44. The pointers I take from these cases are as follows: (1) “Grounds” is an ordinary (albeit a little archaic, at least in the view of some of my fellow judges) English word which has to be applied to different sets of facts. So, in deciding whether a particular piece of land comprises all or part of the “grounds” of a dwelling, it is necessary to adopt an approach which involves identifying the factors relevant in that case and balancing them when they do not all point in the same direction. (2) The discussion in HMRC's SDLT Manual is a fair and balanced starting point for this exercise, but each case needs to be considered separately in the light of its own factors and the weight to be attached to them. Listing them briefly, the factors addressed in the SDLT Manual are: historic and future use; layout; proximity to the dwelling; extent; legal factors/constraints. (3) Section 116(1)(b) refers to a garden or grounds “of” a dwelling. The word “of” shows that there must be a connection between the garden or grounds and the dwelling. (4) Common ownership is a necessary condition for adjacent land to become part of the grounds of the dwelling, but it is clearly not a sufficient one. (5) Contiguity is important; grounds should be adjacent to or surround the dwelling; Hyman. (6) One requirement (in addition to common ownership) might be thought to be that the use or function of the adjoining land must be to support the use of the building concerned as a dwelling (Myles-Till). That may be putting the test too high to the extent it suggests that unused land cannot form part of the “grounds” of a dwelling (cp Hyman in the FTT at [62]). Such a requirement must also contend with the decision of the Court of Appeal in Hyman and Goodfellow that it is not necessary, in order for garden or grounds to count as residential property, they must be needed for the reasonable enjoyment of the dwelling having regard to its size and nature. (7) In that light, the “functionality” requirement might perhaps be put the other way round: adjoining land in common ownership will not form part of the “grounds” of a dwelling if it is used (Hyman in the FTT at [62]) or occupied (Withers at [158]) for a purpose separate from and unconnected with the dwelling. That purpose need not be (although it commonly will be) commercial (Withers). This is subject to the points discussed in (8) and (9) below. (8) Other people having rights over the land does not necessarily stop the land constituting grounds. For example, 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. As the recent decision of the Supreme Court in Fearn and others v Board of Trustees of the Tate Gallery,[2023] UKSC 4 , indicates, other people may have a range of rights that can impact on a landowner's use and enjoyment of their land and statute law intervenes in a range of fields (planning and environmental law being obvious examples). Indeed, once one accepts (as we are bound by authority to accept) that “grounds” extends beyond the land needed for the reasonable enjoyment of a dwelling, it seems almost inevitable, particularly in a rural context, that third parties (not the landowner) may have rights over or use parts of the “grounds” without that affecting the status of the land for these purposes. All of that together must mean that, whatever else “available to the owners to use as they wish” (Hyman at [62]) may mean, it cannot mean (and Judge McKeever, who herself referred to others' rights, clearly did not intend it to refer to) untrammelled dominion unaffected by the presence or rights of others. (9) 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. At one end of the spectrum, rights of way will generally not have this effect, even when the right is used for a commercial purpose and the existence and exercise of those rights is unconnected with the dwelling. At the other end of the spectrum, the use of a large, defined tract of land (which had historically been in separate ownership) for agricultural purposes by a third party who has rights enabling them to use that land in that way will result in that area of land not forming part of the grounds of a dwelling (Withers).”
“88. We therefore agree with Mr Small [counsel for Mr and Mrs Sloss] that there must be some link with the dwelling and the grounds beyond the fact that they had been purchased together in a single transaction. There must be a functional relationship between the dwelling and the grounds. Ms van der Westhuizen [counsel for HMRC] agreed with that analysis.” “106. Even if we are wrong in saying that the grazing was, and is commercial, nevertheless we find that with the exception of field 7 and the paddock, the other fields have very little functional purpose for a house of this size and type. It is not a stately home. It is an attractive house that, with an adequate curtilage, is of a style and size that is available, for example, in Edinburgh.” “107. In summary, looking at all of the evidence, we find that the Appellants have discharged the burden of proof and established that at least part of the pasture land was non-residential. Accordingly, too much LBTT has been paid.”
“123. This Tribunal adopts the reasoning of Judge Citron in Myles- Till as follows: at [44]: “what indicates that a piece of adjoining land has become part of the “grounds” of a dwelling building? Technically, fact that a dwelling building is sold together with adjoining land, as a single chargeable transaction for SDLT purposes, does not make that adjoining land, necessarily, part of the grounds of the dwelling building: section 55 clearly envisages the possibility that the subject matter of a single chargeable transaction will include both residential and non residential land. Common ownership is a necessary condition for the adjacent land to become part of the grounds of the dwelling building – but not, in my view, a sufficient one.” 124. In respect of HMRC’s submissions relating to the “use of land” the Tribunal does not accept their submission that it is sufficient that the adjacent land is available to the GW to use as he wishes. The Grazing agreement does contain restrictions on his use of the land as set out in his submissions. 145. HMRC’s manual, SDLT 00470 - extent of land and geographic factors states that the extent/size of land in question will also be relevant in relation to a building and that the test is not simply whether the land comprises garden or grounds but whether it comprises the gardens or grounds of the dwelling. 147. GW stated that if the grazing lands and the Woodland Trust land where [sic] disposed of, then the property would have a perfectly adequate garden and grounds. The property would, however, require the driveway through the grazing lands in order to obtain access. 148. The Tribunal considered that the extent of land the grazing land and Woodland Trust land do not form part of the garden or grounds of the dwelling. 153. The Tribunal again adopts the approach of Judge Citron in Myles-Till that “the words “of” and “use” indicate that the use or function of adjoining land itself must support the use of the building concerned as a dwelling. The grazing land and Woodland Trust land do not provide that support.”
“(2) Firs Farm is registered at the land registry under title number LT189247. It comprises a five-bedroomed property with landscaped gardens, two double garages, a manege, a paddock and an eight-acre field. The total plot is approximately ten acres. Given the size of the dwelling this is an appreciable plot but unlike some of the other cases is not so large that the size of the field, in and of itself, is sufficient to indicate that it is not residential in nature. (3) The plot including the garden, paddock and field is contiguous. The photographs available in the Connells particulars of sale show that there is gated access between the rear of the garden and the field. The paddock and manege are also fenced off from the garden. (4) From the photographs and Ms Modha’s unchallenged description of the plot it is plain that the garden, paddock and manege are relatively flat (though there are steps up to the garden from the patio outside the house). The field runs across the back of the paddock, garden and manege and across the back of properties to the west of Firs Farm. The field the falls away steeply from then end of the garden/manege/paddock to the far boundary. The vertical drop is 16m across the approx. 160m length of the field with the greater drop being closest to the garden. As a consequence of this topography the field is not visible from the house itself. The full extent of the field is, however, visible from the end of the garden and, at least, the far end of the manege (visibility being more likely from closer to the house from the saddle of a horse) and thus it is visible from the dwelling in section 116 FA03 terms (which the Appellant accepts includes the garden, paddock and manege). One of the very attractive amenities of Firs Farm as a whole is the sweeping views from the rear.”