A couple have won a six-figure stamp duty battle with the taxman after arguing a paddock was not part of their residential land.
Taher and Zahra Suterwalla paid £3.6m for a seven-bedroom home with a swimming pool, pavilion, tennis court and paddock outside Henley on Thames in December 2020.
When filing their stamp duty land tax return, the couple declared their property was “mixed-use” – the term for a property with residential and non-residential elements – and calculated they owed £169,500 in tax.
In August 2021, HM Revenue and Customs opened an inquiry into the couple’s tax affairs, which concluded that they should have paid almost twice as much, or an extra £161,250, bringing the total stamp duty bill to £330,750.
Stamp duty rates are considerably lower for properties with non-residential elements such as working agricultural land or a shop. No tax is due on properties worth less than £150,000. After that 2pc is levied between £150,001 and £250,000 and 5pc on the remainder.
By comparison, buyers pay 5pc on residential properties worth between £250,001 and £925,000, 10pc up to £1.5m and 12pc above that.