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HMRC defeated on Stamp Duty Land Tax saving scheme case

28 April 2011

A taxpayer business has recently won a decision against HMRC in the First Tier Tax Tribunal over an SDLT saving scheme which was put in place on a property transaction with a purchase price of about £65million. The saving relied on a combination of two SDLT reliefs, for sub-sales and for connected party transfers into partnerships.

It’s been very rare for HMRC to take SDLT cases to the courts since the introduction of SDLT in 2003, and this defeat for them may give them cause for thought over possible future court action, despite a concern amongst tax advisers that HMRC are looking strongly into challenging SDLT saving schemes.

The particular scheme used in this case may not be workable now, given that SDLT anti-avoidance legislation has been introduced since the transaction in question took place. What will be really interesting is if HMRC dare go to court in future on the grounds of that anti-avoidance legislation, so we can see if the courts will back it up.

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