Its 7.5 acres of land include “delightful gardens and grounds”, with a barn, a walled kitchen garden, woodland, ponds, a wildflower meadow and an outdoor swimming pool.
The top rate of stamp duty is 12pc for the portion of a residential property worth over £1.5m. However, for commercial properties, the rate is just 2pc for the portion between £150,001 and £250,000, and 5pc on the remaining amount.
The crucial question the tribunal considered was whether providing paying guests with accommodation was carried out with sufficient “permanence and continuity” for the property to qualify as commercial.
Despite HMRC’s scepticism regarding the viability of the holiday accommodation business and the sporadic nature of bookings, Tribunal Judge Amanda Brown KC found Ms Hurst’s claims credible.
The judge highlighted that investments had been made to adapt the property for commercial use.
Shumaim Rizvi, of law firm Lex Legal Practice, said the tribunal ruling sets a “significant precedent” for property owners challenging HMRC’s stamp duty assessments.
He added: “This decision underscores the importance of providing comprehensive evidence when disputing HMRC assessments.
“Property owners should ensure that any commercial activities are well-documented and meet the necessary thresholds for tax classifications.”
An HMRC spokesman said: “We are carefully considering the tribunal’s decision.”