In Oisin Fanning v HMRC [2023] EWCA Civ 263 the Court of Appeal found that a scheme to avoid Stamp Duty Land Tax (SDLT) by granting of an option immediately after purchase was not sufficient to claim sub-sale relief. This case imvolved a £5million property but there are 41 further appeals standing behind the decision.

  • Glendale Enterprises Four Ltd (the Vendor) entered into an agreement with Mr Fanning (the Purchaser) for the sale of a property for chargeable consideration of £5 million.
  • On the same day, Mr Fanning granted San Leon Energy Plc a 25 year option to purchase the property, at its market value, for the sum of £100.
  • HMRC raised a Discovery Assessment for £250,000 of SDLT on the basis the chargeable consideration for the acquisition was £5m.
  • In opposing the assessment, Mr Fanning contended that Sub-sale Relief was available which meant the first contract was disregarded making the consideration for the transaction the £100 paid for the grant of the option as:
    • The purchase agreement was a contract for a land transaction, and;
    • The granting of the option represented the 'assignment, sub-sale or other transaction' of the subject matter of the first contract.
  • HMRC argued that the granting of an option was not an 'assignment, sub-sale or other transaction' for the purposes of Sub-sale Relief so it did not apply as the taxpayer had intended.
  • It was an undisputed fact that if the planning did not have effect, SDLT would be chargeable on the sale of the property for £5 million.
  • The taxpayer’s appeals to the First Tier and Upper Tribunals were dismissed.
  • Mr Fanning appealed to the CoA.

The CoA looked at Sub-sale Relief purposively and concluded the grant of an option did not meet the legislative conditions as:

  • A typical sub-sale involved a purchaser of land transferring rights over that land to a third party.
  • These rights needed to give the third party the entitlement to call for a conveyance of the underlying land to qualify for the relief.
  • Granting an option could not give the third party the entitlement to call for a conveyance until that option was exercised. In this case the option was not exercised at the relevant time, when the property was acquired by Mr Fanning so the relief did not apply.
  • Sub-sale relief provides for a deemed secondary contract between the purchaser and the third party, that is not substituted for an actual contract if one exists (in this case the terms of the option agreement could not be said to be the secondary contract).
  • Sub-sale relief also required substantial performance of that deemed contract by way of a real world event, a conveyance.
  • The granting of an option which remained unexercised was not substantial performance in these terms.

The appeal was dismissed.


The CoA stated that there were 41 appeals standing behind this decision.

Sub-sale relief has been amended from March 2012 (after the transaction) to specifically prevent this kind of planning.

Useful guides on this topic

SDLT: Stamp Duty Land Tax: start here
What is SDLT? What are the SDLT rates? What is exempt from SDLT? What reliefs are available? When are returns due? When can you amend a return?

Discovery Assessments: SDLT
When can HMRC issue a Stamp Duty Land Tax (SDLT) assessment outside of the normal statutory time limits? What conditions must be met?

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

Sub-sale relief avoidance scheme failed to save £250,000 SDLT
In Oisin Fanning v HMRC [2022] UKUT 00021, the Upper Tribunal dismissed an appeal against a £250,000 assessment for Stamp Duty Land Tax (SDLT), confirming that a sub-sale relief tax avoidance scheme used failed to meet the qualifying conditions for the relief to work.

External links

Oisin Fanning v HMRC [2023] EWCA Civ 263

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