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HMRC wins stamp duty court case

28/09/2023

HM Revenue & Customs (HMRC) has won a court case, claiming victory over a scheme designed to help property buyers avoid paying stamp duty land tax (SDLT). The case involved an SDLT avoidance scheme perpetrated by the Vardy group, which wanted to structure the purchase of a property through a newly-formed unlimited company and distribute the property as a dividend to the shareholder company.

A tribunal found that the unlimited company had not carried out company law requirements for declaring a dividend and the ultimate owner of the property had indirectly provided the purchase price.

Following the victory, regulations have been laid to prevent a wider range of SDLT avoidance schemes. The rules will give tax authorities better access to information about the schemes and those who promote and use them, allowing them to be challenged and shut down more quickly.

“This victory at the First Tier Tribunal sends a clear message to tax avoiders that we will challenge avoidance relentlessly,” said Jim Harra, HMRC’s director general of business tax. “The decision is good news for the vast majority of taxpayers who pay, rather than try to dodge, their taxes.”

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