SDLTM00440 | Scope: what is chargeable: land transactions: garden or grounds - definitions

(This page was introduced on 25 June 2019)

Considering whether land is garden or grounds- Definitions

Limb (b) of the residential property definition in section 116(1) FA2003 refers to:

• ‘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)’

The language of the statute should be given its natural meaning, so dictionary definitions can be helpful. However, there are many different dictionary definitions of ‘garden’ and ‘grounds’. These may be useful indicators when applied to the land, but none are determinative. Generally speaking the definitions of ‘garden’ are more helpful than ‘grounds’.

The definition of ‘garden or grounds’ has been examined by the courts in the past for other taxes, but only more recently in the context of SDLT. See for example: [Myles-Till [2020] UKFTT 127 (TC), Brandbros [2021] UKFTT 157(TC), Hyman/Goodfellow/Pensfold [2021] UKUT 68 (TCC)]. Cases relating to other regimes can be helpful (see for instance Rockall v Department for Environment, Food and Rural Affairs [2008] EWHC 2408 (Admin)) but we must be careful of not being over reliant on them. For the purposes of SDLT there is no statutory concept of ‘reasonable enjoyment’ and no statutory size limit that determines what ‘garden or grounds’ means.

Other statutory definitions of garden or grounds

Further definitions of ‘garden or grounds’ are found within the SDLT legislation:

• Schedule 4A, Paragraph 7 (3) FA2003 in respect of the higher rates where the consideration exceeds the higher rate threshold.

• Schedule 4ZA, Paragraph 18 (3) FA2003 in relation to the higher rate for additional dwellings (HRAD) and dwellings purchased by companies.

• Schedule 6B, Paragraph 7 (3) FA2003 in respect of Multiple Dwellings Relief (MDR).

These schedules use a similar, but not identical definition: ‘Land that is, or is to be, occupied or enjoyed with a dwelling as a garden or grounds (including any building or structure on that land) is taken to be part of that dwelling’ .

The following guidance pages (SDLTM00440 to SDLTM00480 inclusive) focus on the definition of ‘garden or grounds’ within s.116 (1) (b) FA2003.