Mixed-use headaches and hurdles

Hillier Hopkins LLP

Chartered Accountants & Tax Advisers

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Three cases, Hyman, Pensfold and Goodfellow, were unsuccessful in claiming a mixed-use classification at the First Tier Tribunal. As the cases were similar a joint claim was put forward to the Upper Tier Tribunal (“UTT”)

  • The Hymans’ property included a house, barn and 3.5 acres.
  • The Goodfellow property included a house, home office over the garage, stables and 4.5 acres; and
  • The Pensfold property included a house with 27 acres.

The key point of contention was to determine whether the land sold together with the house was, or formed part of, the garden or grounds of the house.

Upper Tribunal findings

The UTT considered the arguments put forward in order classify garden and grounds, including applying HMRC’s guidance for calculating the size of a garden for Capital Gains Tax purposes. However, they were not of the view that the arguments relying upon the heritage of the wording were persuasive. Although HMRC argued against their own guidance the UTT preferred the arguments of HMRC.


Purchasers of properties with substantial grounds are likely to continue to be subject to scrutiny if they seek to argue a mixed-use classification.

The persuasive cases will be those with pronounced non-residential elements such as business premises or commercially farmed agricultural land.

Mixed-use purchases can be a complex area. Everyone’s situation is different and getting advice that is tailored to your unique situation can ensure that your affairs are as efficient as possible.

Do you need extra information?

Liam Henry - Principal at Hillier Hopkins

Liam has developed a specialism in the property and construction industry, particularly in relation to the taxes that have a specific impact in this area, such as CIS and VAT.

Contact Liam at liam.henry@hhllp.co.uk or on +44 (0)1923 634416