Why reclaiming stamp duty on wayleaves, rights of way and tree preservation orders is most unlikely to succeed

Blick Rothenberg have written an article on the subject of why reclaiming stamp duty on wayleaves, rights of way and tree preservation orders is most unlikely to succeed.

In an earlier edition of this publication, it was said that “the Wayleave Agreement, … allows eligible homeowners to pay a reduced stamp duty fee”. It does not explain why.

It is reasonable to infer that the reason is that by entering into a wayleave agreement at completion the buyer is purchasing a property that is not exclusively “residential property”. In my opinion, there are two problems with this argument.

First, the point at which a property should be classified for stamp duty purposes is completion, not the end of the completion date. That the buyer chooses to give another person permission to use part of the land for non-residential purposes at or after completion does not mean that they have bought “mixed” property. The First-tier Tax Tribunal said the same thing, dismissing an appeal against HMRC’s decision not to refund stamp duty in similar circumstances.

Second, even if the wayleave exists before completion – because the seller or their predecessor had entered into the wayleave agreement rather than the buyer – the agreement is most unlikely to convert the landowner’s garden or grounds into “non-residential property”.

Arguments that wayleaves, rights of way and tree preservation orders engage the non-residential or mixed stamp duty rates are, in my opinion, virtually certain to fail. HMRC are consulting on making changes to the stamp duty rules on mixed-use transactions (as well as multiple dwelling transactions) to prevent incorrect or abusive claims.

The proposed changes would certainly end attempts to reclaim stamp duty based on wayleaves, rights of way and tree preservation orders.

Written by Sean Randall, partner at Blick Rothenberg Ltd, editor and author of Sergeant & Sims on Stamp Taxes, CTA (fellow) and chair of the Stamp Taxes Practitioners Group.

Kindly shared by Blick Rothenberg Ltd

Main photo courtesy of Pixabay