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Tribunal Ruling Exposes Scheme to Cut SDLT Bills

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In a recent ruling by the Upper Tribunal, property owners utilising a tax avoidance scheme to cut Stamp Duty Land Tax (SDLT) bills have been held liable. Dating back to property purchases as early as 2010, buyers employed a marketed scheme reminiscent of the Project Blue case from 2018.

The scheme aimed to eliminate potential SDLT liabilities associated with new residential property acquisitions.

Legal Manoeuvres

The property owners contested the closure notices on two grounds. Firstly, they argued that HMRC failed to open valid enquiries into their land transaction returns, rendering closure notices invalid. Secondly, they claimed the discovery assessments by HMRC were ineffective.

Legal Manoeuvres

The intricate scheme involved initial purchase of a property’s freehold from the original owner. Subsequently, the freehold was sold to a Guernsey-based company specifically created for this scheme. The intention was to bypass Stamp Duty Land Tax (SDLT) payment, exploiting a relief provision under section 45(3) of the Finance Act 2003.

HMRC’s Pursuit

Despite HMRC’s assertion that SDLT avoidance was not permissible, property owners persisted with their appeals. Challenges revolved around the validity of HMRC’s enquiries and the effectiveness of discovery assessments.

HMRC’s Pursuit

The legal battle extended over several years, with HMRC’s investigations leading to closure notices. Appeals were filed, withdrawn, and then amended with new grounds. Allegations included HMRC’s failure to give proper notice of enquiry, ultimately leading to a dismissal in the Upper Tribunal.


The Upper Tribunal dismissed all appeals, upholding closure notices. The ruling emphasised the applicability of section 75A of the Finance Act 2003 to the transactions, drawing parallels with the Project Blue case.

Property owners, attempting to exploit legal nuances, faced the consequences as the Tribunal ruled in favour of HMRC.

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