SDLT: Shafted? No

When you spend £20m on a property, it’s worth exploring every avenue that might have a prospect of leading to Stamp Duty Land Tax (‘SDLT’) being charged only at non-residential rates.  And, as we have explained before, that requires only that the purchase includes some element (however small) which doesn’t meet the description of ‘dwelling-house’ or ‘garden or grounds’ of one.

In 39 Fitzjohns Avenue Ltd v HMRC [2024] UKFTT 28 (TC) the question before the First-tier Tribunal (‘FTT’) was whether the presence on the eponymous property of a ventilation shaft for a railway tunnel running underneath the property denatured that part of the land as ‘garden or grounds’.  Or, to be strictly accurate, whether the character of the land immediately surrounding the ventilation shaft was affected: for the shaft itself was not part of the land purchased but had remained in the ownership of the railway company.

For safety reasons, the area round the shaft (which was itself surrounded by a brick wall some five feet high and covered with a steel mesh and steel girders) was fenced off so as to form what was described as an “island” of about 40 square metres in the grounds.  The question was – was the fenced-off area nonetheless part of the grounds of the property?

The question whether a particular piece of land is ‘grounds’ of a property has been described as a multi-factorial one.  In this case, the FTT set out no fewer than sixteen factors derived from earlier case law: none is determinative, and the weight given to each may depend on the circumstances of the case.

The FTT came down on the side of HMRC: the “island” remained part of the grounds, despite its being inaccessible (or, at least, intended to be inaccessible) to the owners of the property.  And size mattered: the area was “not particularly large in comparison with the land as a whole and does not affect the ability of the owner of the Property to use the land as a whole as the grounds of the dwelling.”

At first blush, the decision is surprising.  Regardless of its size in relation to the rest of the plot, one may baulk at the idea that an area of land which is not only inaccessible but also confers no benefit on you or the property can be regarded as part of your grounds.

At second blush, less so.  The lease under which the relevant land was held appears to have contained no covenant or other requirement that the shaft be fenced off, so it would appear that the fencing-off of the land around the shaft, though no doubt prudent, was essentially voluntary.  And if it were indeed the case that fencing off a part of the grounds and rendering it inaccessible were sufficient of itself to denature that part as grounds, the opportunities this would create for mitigating SDLT are obvious.

So the FTT’s decision must be the right one.  As covered in some of our previous articles on SDLT cases, the courts have previously found that grounds are not denatured simply by dint of being encumbered with a “sewage treatment plant” (Bloom), poles supporting power cables (Faiers) or a right of way (Averdieck).  Now ventilation shafts are added to the list of acceptable inconveniences.

For more information about SDLT, please get in touch with your usual BKL contact or use our enquiry form.



Sam Inkersole

In 2022, Sam won the Taxation’s Rising Star award at the Taxation Awards in and was named in the Accountancy Age 35 Under 35.

Jon Wedge

While Jon’s client work focuses on the financial services sector, he also oversees the firm’s assurance service, as well as supporting the trainees following in his footsteps.


Elana joined us in 2017 as an ACA trainee, after graduating from Durham University where she had studied languages. She is now a manager in our assurance team.


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