Couple hit with 48k Stamp Duty bill after sheep argument fails

A couple have been ordered to pay an additional £48,450 in stamp duty after an unsuccessful attempt to classify their property as "mixed-use" because it included a field used for grazing sheep.

Ian Sinclair and Diana Chilvers purchased a Grade II-listed home in Sussex for £1.8 million in 2024. The property included a one-acre field that had periodically been used by a local farmer to graze sheep.

Properties classified as mixed-use, such as homes combined with commercial premises or agricultural land, can qualify for lower, non-residential rates of Stamp Duty Land Tax (SDLT), potentially saving buyers thousands of pounds.

Believing their property met the criteria, the couple paid £80,000 in stamp duty based on the non-residential rate. However, in 2025, HMRC determined the property did not qualify and demanded a further £48,450.

HMRC argued that the sheep grazing was only intermittent and amounted to maintenance of the land rather than genuine agricultural use.

The couple appealed to the First-tier Tribunal, claiming the field had been actively used for agriculture.

They pointed out that, since 2012, the previous owners had allowed a local farmer to graze sheep on the land at intervals, although no payment was made.

In reaching its decision, the tribunal considered the property's sales particulars, which described the field as suitable for grazing animals or exercising horses, along with a written agreement allowing 6 to 12 sheep to continue grazing after the purchase.

Despite this evidence, the tribunal ruled in favour of HMRC. In a judgment issued on 29th May, it concluded that the grazing activity was "limited, intermittent, and consistent with maintenance of the land". It also noted that the homeowners retained full control of the field, meaning it remained part of the property's grounds.

The case highlights ongoing disputes over what qualifies as "mixed-use" property for stamp duty purposes. Under HMRC rules, agricultural land sold as part of a property's garden or grounds is generally subject to residential stamp duty rates.

Currently, the highest rate of stamp duty on non-residential property is 5%, compared with 12% for residential property purchases.

This article is for general information and interest purposes only and is not intended to provide legal advice, nor does it necessarily represent the views of HCB.