The owners of a luxury London flat have saved £1.7m on stamp duty after they successfully challenged the tax status of a “large cupboard”.

Raj and Varsha Sehgal have won a legal battle with HMRC after buying a £18.25m property in Grosvenor Square in 2022, which came with a storage unit in the basement.

The flat was initially treated as a residential property, making it subject to the highest rate of stamp duty .

But the owners argued that they should receive a large tax refund, saying the property is ‘mixed use’ due to the storage unit which measures less than two by four metres - tax rules stipulate that higher residential rates of stamp duty should only be applied if the entire property is deemed to be residential.

A first-tier tribunal found in the couple’s favour, and t

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