Yes, on the right facts. In Inngrays, the First-tier Tribunal held that land let to an electricity network on an exclusive lease was not garden or grounds of a five-flat building.[1][2] The purchase was mixed-use, so non-residential rates applied and HMRC's extra charge of £341,750 fell away.
Key facts
- Inngrays Ltd bought a five-flat building for £7,750,000 on 29 May 2024 and paid £377,000 of SDLT on a mixed-use basis.[1]
- HMRC said the whole site was residential and sought a further £341,750.[1]
- Residential property includes land that is or forms part of the garden or grounds of a dwelling.[2][3]
- The tribunal found the substation had a self-standing commercial function, so its land was not grounds.[1]
- Mixed-use purchases pay 0% up to £150,000, 2% to £250,000 and 5% above.[4]
What happened in Inngrays?
Inngrays Ltd bought the freehold of a large period building in London, arranged as five flats, for £7,750,000. Completion was on 29 May 2024.[1] At the back stood a brick electricity substation. Its land had its own leasehold title and had been let to the electricity network since 1963. The current lease ran for 20 years from 2010 and gave the tenant exclusive possession.[1]
The company filed on a mixed-use basis and paid £377,000. HMRC decided the whole property was residential and issued a closure notice for a further £341,750. The company appealed.[1]
Why did the tribunal say the substation land was not grounds?
Residential property means a dwelling plus land that is or forms part of its garden or grounds.[2] HMRC's own guidance accepts there is no statutory size limit and that dictionary meanings are indicators, not tests.[3] The tribunal weighed all the factors together.
The owner and the flat occupiers were wholly excluded from the land. The tribunal called it "a case of complete exclusion". The substation did not support the flats as homes. It served a wider electricity network, a "self-standing commercial function" separate from the dwellings.[1] So the purchase included land that was not residential, and it was mixed-use.[1]
How is this different from cases HMRC has won?
Earlier tribunals refused mixed-use claims where utility rights ran over or under a garden, such as overhead cables, because the land stayed usable as part of the home. The tribunal distinguished those cases. Here a separate building occupied the land under an exclusive lease.[1]
That makes the point narrow. In our view, a wayleave, a shared drive or a right of way over the lawn is unlikely to do the same job.
What does it mean for a North West investor?
The gap between the two tables is large for a company. A company buying dwellings usually pays the higher rates, which add 5% to each residential band.[5][6] Mixed-use land pays 0% to £150,000, 2% to £250,000 and 5% above.[4]
Multiple Dwellings Relief is gone for transactions completing on or after 1 June 2024, unless contracts were exchanged by 6 March 2024 and not varied.[7] That makes the mixed-use question more valuable than it was. Older blocks across Liverpool, Manchester and Lancashire often have substations, telecoms compounds or let garages on the title. Our guide to mixed-use property and SDLT sets out the wider rules.
What should you do now?
Before you buy, read the title and every lease. A separate title for part of the land, a long lease to a third party and exclusive possession are the facts that carried Inngrays.[1] If you have already paid residential rates on a building like this, ask whether the return can still be amended or a claim made.
Keep the decision in proportion. It is a First-tier Tribunal decision on its own facts, and HMRC may still seek permission to appeal.[1]
A company buys a building of four flats in Liverpool for £1,200,000. All figures are invented. At the back is a substation on its own leasehold title, let to the electricity network on a long, exclusive lease.
If the whole site is residential, the company pays the higher rates: 5% on the first £125,000, 7% on the next £125,000, 10% on the next £675,000 and 15% on the last £275,000.[5] That is £123,750.
If the substation land is not grounds, as in Inngrays, the purchase is mixed-use. The bill is 0% on the first £150,000, 2% on the next £100,000 and 5% on the remaining £950,000.[4] That is £49,500.
The difference is £74,250, on one fact about one small piece of land.
This is a good result, but it is not a planning tool. The facts were unusual: a separate title, more than 60 years of separate occupation and complete exclusion of the owner.[1] We would claim mixed-use on facts like these, with the lease, title plan and photographs on file before the return goes in. We would not claim it for a wayleave, a cable or a shared path. The burden of proof sits with the buyer.[1]
Common questions
Does any utility equipment on a site make it mixed-use?
No. The tribunal said third-party rights and commercial use are not conclusive on their own. It was the combination of an exclusive lease, a separate building and a self-standing commercial function that mattered.[1]
Is the Inngrays decision settled law?
No. It is a First-tier Tribunal decision on its own facts, and HMRC may still seek permission to appeal.[1] Treat it as a helpful example, not a rule.
Can a buyer still combine a mixed-use claim with Multiple Dwellings Relief?
Generally not. MDR was abolished for transactions completing on or after 1 June 2024, unless contracts were exchanged by 6 March 2024 and not varied after that.[7] Inngrays completed on 29 May 2024, just before the cut-off.[1]
Is there another way for a block of flats to get non-residential rates?
Yes. Buying 6 or more residential properties in a single transaction is treated as non-residential.[4] Our post on build to rent and SDLT covers that rule.
Sources
- Inngrays Ltd v HMRC [2026] UKFTT 1478 (TC), released 23 October 2026. caselaw.nationalarchives.gov.uk/ukftt/tc/2026/1478
- Finance Act 2003, section 116. www.legislation.gov.uk/ukpga/2003/14/section/116
- HMRC SDLT Manual, SDLTM00440: garden or grounds. www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm00440
- GOV.UK, SDLT rates for non-residential and mixed land and property. www.gov.uk/stamp-duty-land-tax/nonresidential-and-mixed-rates
- GOV.UK, SDLT residential property rates. www.gov.uk/stamp-duty-land-tax/residential-property-rates
- HMRC, Higher rates of Stamp Duty Land Tax. www.gov.uk/guidance/stamp-duty-land-tax-buying-an-additional-residential-property
- HMRC, SDLT: abolition of Multiple Dwellings Relief from 1 June 2024. www.gov.uk/government/publications/stamp-duty-land-tax-abolition-of-multiple-dwellings-relief-from-1-june-2024
Kieran Holsgrove is a Director and Co-Founder of Grafene Accounting, the property tax specialist firm based in Liverpool. He advises property developers, investors and landlords across Merseyside, Greater Manchester, Lancashire and Cheshire on tax structuring, developer VAT, SDLT and the long-view decisions that compound over the life of a portfolio.
This article is general information, not personal tax advice, and tax rules change. Your own position depends on facts we cannot see from here. Please take advice before acting on anything above.