I’ve had the pleasure of meeting so many firms and solicitors this autumn — from Newcastle down to Bournemouth — as I’ve been out delivering talks and webinars on a much misunderstood topic: the risks firms face when advising on SDLT once things get complex.

And “complex” really is a moveable feast. Every conversation seems to bring a new scenario, a fresh nuance, or a unique client story. What’s been encouraging, though, is how many firms are actively thinking about where to draw the line — how to make it clear to clients that once the SDLT position isn’t straightforward, specialist advice is not just sensible, but essential.

As I travel next to Liverpool and the Lake District, I’m genuinely heartened by the considered discussions taking place in practices and the legal press. And this is not about party Conference soundbites or the upcoming budget speculation.  It’s clear that the profession is keen to get it right, and we have Angela Rayner in no small part to thank for some of this.

Having now read through a fair few feedback forms from my sessions, one thing stands out: solicitors are especially interested in the real-world case law — how decisions are reached and what practical lessons can be drawn from them.

So, this month, I’ve picked out an upcoming appeal case that is well worth keeping an eye on.

Mixed-use properties are once again jostling for position to take centre stage. Clients are understandably eager to reduce the hefty SDLT bills that come with residential rates, and HMRC’s own guidance adds to the intrigue — suggesting we look to dictionary definitions of “garden” and “grounds” and consider judicial authority, but reminding us that none of these are decisive.

The test for SDLT, of course, is not the same as for principal private residence relief, and that’s where much of the confusion creeps in. When assessing whether land is “residential” or “non-residential,” the key factors remain: use, layout, proximity, size, and any legal constraints.

It’s also worth remembering that the status of the land is assessed at the time of the transaction. Historic use can be relevant (so keeping records is wise), but the buyer’s intended future use is not. Where land is being actively and substantively used for commercial purposes — for example, where there’s genuine agricultural or business exploitation — it’s a strong sign that the land won’t form part of the dwelling’s “grounds.”

HMRC makes an interesting distinction here: activities such as beekeeping, grazing, or equestrian pursuits might be either commercial or purely recreational, depending on the facts. The presence and terms of any lease, for instance, can be crucial. In general, paddocks and orchards are treated as residential, whereas fallow fields genuinely used for agriculture tend to be non-residential.

A recent case, Brzezicki v HMRC [2024] UKFTT 845 (TC), illustrates just how fine these distinctions can be. The tribunal considered a manmade stream used for breeding trout. It wasn’t being run commercially at completion, but the majority held that this didn’t matter — the land could still be treated as non-residential. However, one tribunal member dissented, arguing that it’s not enough to point to former commercial activity unless there’s evidence of actual use at completion.

The same split appeared again when it came to whether land must be contiguous with a dwelling to form part of its grounds. The majority thought so; the dissenting member disagreed, suggesting that separation by a stream shouldn’t, in itself, be decisive — what matters is proximity and the overall picture.

It’s a perfect example of why SDLT “complexity” is often in the eye of the beholder — and why staying alert to case law developments is so essential.

If your firm is encountering similar grey areas or would like to explore where the line should be drawn when it comes to SDLT and specialist tax advice, we’d be delighted to help. We work alongside solicitors and conveyancers nationwide to provide clear, practical guidance where SDLT becomes more than a box-ticking exercise – so give us a call.

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