HM Revenue & Customs (HMRC) has highlighted details of a popular Stamp Duty Land Tax (SDLT) avoidance schemes in on its Spotlights pages.
The scheme works by using a staggered completion often with an intermediate sale to depress the purchase price for SDLT so that it falls below the threshold. These arrangements exploit 'sub sale relief' which is designed to prevent double taxation when there are multiple completion dates.
HMRC says that "in some cases there is doubt about whether transactions actually meet the conditions for the sub sale relief. Even if they do, anti-avoidance legislation effective from December 2006 counters any arrangements seeking to depress or avoid the tax on the full amount paid for the property, including those seeking to exploit sub sale relief."
HMRC will challenge these type of SDLT scheme where it finds them, and take action through the courts where appropriate.
Source: HMRC
