Does s75A catch sub-sales?

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    Caroline Smith-Clark
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    In relation to Section 75A, in a case where there is an assignment, sub-sale or other transfer of rights would the ultimate purchase also be a “scheme transaction”?

    In other words, would the money that the purchaser pays to the seller be taken into account for the purposes of calculating the notional transaction value?

    #309 Reply
    Patrick Cannon
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    While the answer will always ultimately depend upon the factual circumstances, my view is that it is quite possible for the sub-sale not to be caught by section 75A. HMRC’s own published technical guidance actually confirms this to be the case.

    #310 Reply
    Caroline Smith-Clark
    Guest

    Yes, the some of the guidance states that mere linkage through conveyancing succession will not suffice to make the transactions linked.

    However, HMRCs Technical Newsletter 4 states that their view is that a scheme transaction which is a transfer of rights will necessarily be ‘involved in connection with’ both the disposal and acquisition despite the case that V may not know of the subsequent transfer of rights.

    Surely they are setting their stall out for a fight in the courts? There doesn’t seem to be much else they can do.

    #311 Reply
    Patrick Cannon
    Guest

    I think that when the guidance was drafted they probably thought that it was sufficient for the guidance to indicate that sub-sales were caught to determine the legal issue. But as the courts have held, official guidance is just evidence of one party’s view of the law albeit to be given due weight given its provenance, but it is by no means conclusive. I actually had in mind the fifth example in the guidance at para 14 where it is admitted that the sale to C is not ‘involved in connection with’ the disposal by V to P.

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