SDLTM00445 | Scope: what is chargeable: land transactions: garden or grounds - when to consider the status of land

(This page was introduced on 25 June 2019)

Considering whether land is garden or grounds - When to consider the status of the land

Establish status of building first

Once it has been established that a building falls within section 116 (1) (a) FA2003, (‘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’) all land forming part of the ‘garden or grounds’ of that building will also be residential property. It is therefore crucial that the nature of the building, and more specifically its status as a dwelling must be established first.

It follows that, if at the effective date there is no building that is used or suitable for use as a dwelling, or in the process of being constructed or adapted for such use, then the associated land under consideration is not residential property.

Then establish status of land

Where land does constitute the ‘garden or grounds’ of an s.116 (1) (a) building, it will be residential property even if the relevant land is sold separately from the building.

It is therefore critical to assess whether the land under consideration forms part of the garden or grounds of a building at the outset. Note that the land being considered includes any building or structure on such land.

Once it has been established that land is ‘garden or grounds’, that land will be within the definition of residential property, and there will be no need to examine further the way that land is used. See for example Brandbros [2021] UKFTT 157 (TC).