In the case of Alan Wood and Elizabeth Veitch v The Commissioners for His Majesty’s Revenue and Customs [2026], the taxpayers have secured a rare win in a mixed-use Stamp Duty Land Tax (SDLT) case.
In June 2023, the taxpayers purchased a new home for £4.5m. Besides the house and the garden, the property included a towpath beyond the brick wall at the end of the back garden. In the wall was a single gate to give access from the garden to the towpath and beyond the towpath was a chain link fence which separated the towpath from another small section of garden (the 'riverside') leading down to the River Thames. The towpath is a section of a busy public right of way which forms part of the Thames Path. It runs the width of the property and is around 3 metres wide.
Due to the busyness of the towpath, the taxpayers said they were not able to sit and relax on it, nor were they able to leave anything on it that might either block, obstruct or interfere with the public right of way and they could not change its character or appearance. The taxpayers said they did not leave anything unattended or unsecured on the towpath that could easily be taken and they did not use it as part of the garden or let their grandchildren play on it.
HMRC argued that the property was entirely residential and so should be subject to SDLT at the higher residential rates. The taxpayers said that the towpath and the riverside were not residential property as they were not “land that is or forms part of the garden or grounds” of the house for the purposes of section 116(1)(b) Finance Act 2003. On this basis, the taxpayers argued that the towpath and the riverside were non-residential property which made the property 'mixed-use' and only subject to SDLT at the lower non-residential rates.
The First-tier Tribunal (FTT) concluded that towpath and the riverside were part of the grounds of the house but that the level of intrusion on the towpath, with some 850 people a day using it, took it outside of section 116(1)(b). Consequently, the towpath was considered to be non-residential which made the property mixed-use and this reduced the taxpayers' SDLT liability from £586,250 to £214,500 (a saving of £371,750).
This is a rare win for the taxpayer in a mixed-use case and it continues to demonstrate the importance of careful consideration of the facts and taking appropriate professional advice.
If you have any SDLT queries and would like advice, please contact our tax specialists.
