In Oisin Fanning v HMRC [2020] TC07776, the First Tier Tribunal (FTT) found that HMRC's discovery assessment was validly issued. The assessment represented a 5% SDLT charge on the purchase price of a £5 million property in London. Mr Fanning (the taxpayer) had used an avoidance scheme involving a sub-sale relief and grant of options.

  • The taxpayer is the CEO of an Irish company. The taxpayer and other staff spent around a week every month working in London and stayed in serviced apartments.
  • The taxpayer decided to purchase a property in London, which under a mutually beneficial arrangement.would be rented to the Company for staff accommodation when in London. 
  • A Stamp Duty Land Tax (SDLT) scheme was entered into using the following steps:
    • The Vendor (‘V’) and a third-party purchaser (‘P’) entered into a contract for the sale of a chargeable interest in land to be completed by a conveyance.
    • At the same time as the completion of the V-P contract of sale, P granted another person (‘O’) a call option over the chargeable interest for a nominal consideration. The option exercise price was not less than the market value of the chargeable interest at the date of the exercise.
    • P occupied the property having paid the full purchase price demanded under the VP contract of sale.
    • The option was not exercised by O (save as part of any onward sale to some other person). Although in this case, the taxpayer claimed that the option may be exercised.
    • O co-operates in the Scheme. Unless and until the option is exercised, SDLT is chargeable on the (deemed) consideration for the secondary contract, which in this case was £100.
  • In September 2011 a SDLT return was filed within days of completion of the property purchase reporting a £nil SDLT liability.
  • The SDLT return claimed relief under the ‘other’ code and provided no further details.
  • No enquiry was raised by HMRC following the submission of the return.
  • In March 2014 a Discovery assessment was issued by HMRC for the sum of £250,000.
  • The taxpayer appealed. After four years of review, the taxpayer appeled to the Tribunal.

The FTT found that:

  • HMRC's discovery assessment was valid.
  • The option was found to be an ‘other transaction’ for the purposes of SDLT, contract and conveyance.
  • The sub-sale was not completed or substantially performed simultaneously to the completion of the original sale.
  • On considering whether s.75A FA 2003 applied, it was found that the exercise of the option was not a scheme transaction.
  • S.75 A (6) FA 2003 applies on the basis that the effective date of the notional transaction is the date of completion of the scheme transactions in 2011 and the chargeable consideration is £5 million paid by the taxpayer to the vendor.

The appeal was dismissed.


  • S.75A FA 2003 was introduced in 2006 as a response to schemes and arrangements where the objective was to reduce or eliminate a charge to tax in a way which was contrary to the intention of the SDLT legislation.
  • The legislation differs from other targeted tax avoidance legislation, as s.75A does not contain a tax avoidance ‘main purpose test’.


This particular type of SDLT tax avoidance scheme was blocked by an amendment to the legislation which took effect from 21 March 2012.


Property rental profits & losses
How are property profits taxed?

How is accommodation taxed if provided by an employer?

SDLT: Amending returns
How do I amend an SDLT return?

Stamp Duty Land Tax: Rates and allowance
What is Stamp Duty Land Tax (SDLT)? What are the rates of Stamp Duty Land Tax (SDLT)?

Stamp Duty Land Tax
What are the SDLT rates? What is exempt from SDLT? What reliefs are available?

External links

Oisin Fanning v HMRC [2020] TC07776