The First-tier Tribunal has delivered a rare taxpayer win in the SDLT mixed-use arena, finding that 150 acres acquired with a West Sussex country estate were not wholly residential (Goudman-Peachey v HMRC).
Significant areas of land were used for independent, self-standing non-residential purposes, qualifying the acquisition for mixed-use SDLT rates and overturning HMRC’s £477k additional assessment.
The decision recalibrates the ever-shifting residential boundary, reinforces the need for rigorous fact-based analysis, and is a timely reminder that large rural estates do not default to 'grounds' simply because they’re scenic.
A country house sitting within a working estate
It was accepted that the main house at Woodmancote Place was a dwelling. The dispute concerned whether the surrounding land constituted residential 'garden and grounds'.
The evidence showed a functioning rural estate at completion, not merely a high-end home with amenity land; multiple, substantial, non-residential uses co-existed with the residential occupation.
Commercial deer farming
A 60-acre swathe of the estate operated as a commercial deer enterprise established years earlier, involving herd management, culling for meat and organised stalking. Drone footage and mapping showed fenced, clearly delineated areas separate from the formal gardens.
The purchasers acquired the 200-strong deer herd for £30,000 under a written agreement entered into immediately prior to completion and retained the existing professional deer manager. The Tribunal noted this as a continuous commercial business, not a recreational sideline.
Sheep grazing
A further 60-acre stretch was used for sheep grazing by a local farmer. While arrangements were informal at completion, they were quickly formalised and supplemented by other livestock leases.
Although informal grazing has often failed in past cases, the Tribunal found the evidence compelling here: livestock numbers, agricultural classifications, farming infrastructure and clear physical separation from the house all pointed to genuine, ongoing agricultural use.
Arable farming and hay production
Haymaking and arable use often fall foul of being characterised as land maintenance. In this case, however, the scale and formality of the operations, which included maize production by a third-party farmer, were held to be ongoing commercial arrangements.
Any one of these uses could arguably have supported mixed use on its own, but together, they made the conclusion unavoidable.
To top it all off, the land’s registration under the Rural Payments Agency Basic Payment Scheme and Environmental Stewardship Schemes provided powerful objective endorsement of sustained agricultural activity, reinforcing that the land functioned as farmland rather than residential grounds.
Restrictions on the land
In addition to a comprehensive set of commercial enterprises, the Tribunal also made two notable findings illustrating that commercial exploitation is not the only route out of residential classification:
Windfarm lease
Part of the estate was subject to a 99-year lease to Rampion Offshore Wind Ltd for underground cabling. This was not a minor or passive easement; it imposed continuing obligations on the landowner (with an estimated annual cost of £8,000), including soil replacement, reseeding, and land management to address subsidence and ensure safe agricultural use.
The Tribunal treated this as an active infrastructure burden existing at completion.
Rights of way
Unusually, the Tribunal placed weight on the numerous and extensive public rights of way over the land. Local authority regulations governing these imposed requirements to meet certain safety standards and be clear of debris. To meet these obligations, the landowner had to employ personnel to supervise.
Though not determinative, the scale and burden of public access undermined HMRC's argument that this land benefitted the residence.
Why HMRC’s case failed
HMRC argued that the land enhanced the enjoyment of a commanding country residence and therefore formed residential grounds. Whilst some land clearly did, the Tribunal rejected the idea that enhancement alone is decisive where land is simultaneously used for independent commercial or agricultural purposes.
The Tribunal emphasised that land does not cease to be non-residential simply because it is attractive, rural, or extensive. The decisive question is whether, at completion, the land is functionally and economically part of the residential use of the dwelling, or whether it serves a separate and self-standing purpose. At Woodmancote Place, large areas of the estate clearly fell into the latter category.
Practical implications for buyers and advisers
Goudman-Peachey is a fact-heavy but important decision. It confirms that even substantial and scenic estates can qualify for mixed-use SDLT where land is genuinely used for farming, grazing or infrastructure. SDLT turns on substance, not scenery.
Successful cases will usually involve clearly identified non-residential land, contemporaneous arrangements, third-party evidence such as agricultural scheme registrations, and consistency across documentation, witness evidence and visual material. While some arrangements here were informal, formal documentation remains advisable. Buyers should understand which parts of an estate serve residential purposes and which operate independently, and advisers should ensure that those distinctions are clearly supported by contemporaneous evidence.
How we can help
Ultimately, Goudman-Peachey highlights the importance of early analysis when acquiring rural property. Where proper professional advice is taken before a mixed-use filing position is taken, the purchaser is usually protected from penalties if HMRC were to determine the property to be wholly residential.
Mishcon de Reya have an experienced team with extensive expertise in dealing with mixed-use SDLT cases and can assist with reviews of the position before completion and disputes with HMRC over the appropriate filing position. Just recently, we advised clients that a residential property with three acres of land would have a strong case for a mixed use claim, potentially saving the purchaser hundreds of thousands of pounds.