Do SDLT sub-sale schemes work?

Home Forums Patrick Cannon Do SDLT sub-sale schemes work?

This topic contains 7 replies, has 1 voice, and was last updated by  Patrick Cannon 25th October 2017 at 9:01 am.

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  • #873 Reply


    I wanted to know if, with all the recent activity by HMRC challenging sub sale SDLT schemes, you feel that this type of planning still works? If not, is their reason to believe the tide has turned in favour of HMRC and participants should be looking to settle with HMRC if they have the opportunity?

    #874 Reply


    Well we have the new pre-completion sub-sale rules introduced by FA 2013 so the former types of scheme that were intended to be used with the old s45 are no longer appropriate. As far as HMRC enquiries into old sub-sale schemes are concerned I think that these need to be looked at on a case by case basis before advising whether or not to settle.

    #875 Reply


    Thank you Patrick,

    Does that also mean that historical SDLT cases based on old section 45 rules will also be deemed to be inappropriate or is it only cases written after the finance act?


    #876 Reply


    I’m note quite sure I understand your question but basically any pre-FA 2013 scheme that was done and is now under enquiry should be considered on its own merits in deciding whether or not to settle unless it was one of those that were retrospectively blocked. Any new type of scheme would have to pass muster under the new Sch 2A FA 2003 rules.

    #877 Reply

    Sean Goodwin

    Hi Patrick. I used the UCS scheme through Inventive Tax Strategies. I’m sure you know the new HMRC deadline for settlement agreement or challenge is close of business tomorrow 31st Dec 2014. If challenged, how long do you think it could take to resolve given the number of cases? Would HMRC pursue each individual case through court or more likely to get blanket ruling and apply broad brush? I’m tempted to settle but suspect challenge could take years to settle and not sure if HMRC would eventually give up once the size of each individual obligation got down to certain size. Would very much appreciate your thoughts. Thanks.

    #878 Reply


    Project Blue was done in early 2008 but we have only just received the judgment of the Upper Tribunal so that tells us something about how long these matters can take. You will also need to factor in the possibility of a follower notice coupled with an accelerated payment notice. Again I think that these may be open to challenge on various grounds and appealable (see for example the recent news item on the front of my website).
    The Project Blue decision of the UT is also potentially quite helpful to other sub-sale scheme variants in that it confirms the technical integrity of the basic sub-sale structure but raises issues about s75A which may create difficulties in applying that section to other schemes including other Sharia schemes. A key issue will of course be the quality of implementation of the scheme.
    My guess is that as things stand HMRC will not give up until every user is accounted for but ministers and managers change as do governments and and management priorities in five years time may be very different.

    #879 Reply


    My property purchase completed in December 2010 and I had understood that rule changes in 2012/13 were not retrospective. Reading your post it appears they may be some defences, what are these typically please? This is the first contact from HMRC on the matter – is passage of time any defence?

    #880 Reply

    Patrick Cannon

    Andy, there were certain retrospective changes back to 21.3.12 but these should not affect a scheme done in 2010. HMRC generally have 4 years to “discover” that a scheme was done and assess it (unless it was careless or fraudulent). You didn’t say what your scheme was so it is not possible to discuss what the defences might be and in any event this depends on the actual details of the scheme and how it was implemented so a generic advice via this forum is unlikely to be helpful I’m afraid.

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