HMRC Spotlights SDLT avoidance schemes
HMRC have added Stamp Duty Land Tax (SDLT) avoidance schemes to their Spotlights.
HMRC Spotlights identify specific tax avoidance schemes of which HMRC have become aware and that they consider are not likely to have the legal effect desired by those thinking of using them.
Spotlight 10 focuses on arrangements that seek to avoid SDLT on commercial and residential property sales by reducing the purchase price below the SDLT band or threshold. In some cases an intermediate sale, often on the same day, is introduced into the arrangements with the sole intention of removing the true purchase price from tax. This is done with the intention of exploiting ‘sub sale relief’.
HMRC’s view is that these contrived transactions, including those involving sub sales, produce a charge to SDLT on the full amount paid for the property. HMRC note that where such property sale arrangements have been artificially structured to avoid paying the correct amount of SDLT these will be actively challenged, through the courts where appropriate.