HMRC have won their case at the Court of Appeal (CoA) following similar wins at the both the First-tier Tribunal (FTT) and Upper Tribunal (UT), concerting a scheme to avoid Stamp Duty Land Tax (SDLT) on the acquisition of a house in Surrey using a connected company.
The scheme was supposed to work by a company acquiring a property from an unconnected party and that company then distributing the property to the shareholders on completion. The company was owned by the purchasers of the property.
The CoA found that the scheme failed for many reasons:
- It is permissible for courts and tribunals to interpret all legislation using a purposive approach, meaning that the court must take account of Parliament’s purpose when enacting in the legislation and the SDLT legislation was to be purposively construed;
- The company was connected to the purchasers, it was acceptable for this point to be bought up at a later point than when the determination for SDLT was issued; and
- The anti-avoidance sections of the relevant SDLT provisions were applicable to the case.
The judgement was brief as the taxpayers’ case was quite weak.
The decision can be found at: Court of Appeal Judgment Template (nationalarchives.gov.uk)
Please let us know if you have any questions regarding stamp duty land tax, we can assist with ensuing generous reliefs are appropriately applied. We can also advise when to make amendment to returns and how to negotiate with HMRC.
We can further help where you may be sold a scheme to avoid SDLT. The anti-avoidance provisions are now more tightly drafted than they were when the transaction took place in the above case.
