In a major U-turn, HMRC have now offered to supply taxpayers with “further advice about how to proceed” if they are unclear about whether section 75A might apply to their transaction. Ever since the introduction of section 75A in late 2006, HMRC’s stated position is that they would not assist taxpayers seeking HMRC’s views on section 75A on a case-by-case basis because that might assist taxpayers in tax avoidance. This stance flatly contradicted the assurances given to Parliament by the Chief Secretary to the Treasury in relation to section 75A in June, 2007 that “if there are any uncertainties, [HMRC] is happy to advise those who have queries about complex transactions on a case-by-case basis”: Hansard, 5 June 2007, col. 410.
However, the following has recently been added to HMRC’s SDLT manual:
“Following the decision of the Supreme Court in Project Blue in June 2018, the guidance contained in pages SDLTM09050 to SDLTM09275 on S75A is currently under review.
We will update the guidance at the earliest opportunity, meanwhile if you are unclear about whether S75A might apply please contact the SDLT Technical team for further advice about how to proceed.
This addition to the SDLT Manual represents a helpful development as long as the SDLT technical team are properly resourced to deal with what can be expected to be quite a lot of requests for technical guidance.
How to Get Technical Guidance from HMRC
In order to ensure that you get the technical guidance you need and that can be relied upon, the request to HMRC for guidance should contain a detailed factual description of the transaction concerned combined with a full legal and taxation analysis highlighting where the uncertainty with the application of section 75A lies and stating the range of potential outcomes that could apply with arguments in support or against any particular outcome. As with insurance proposals, a full, frank and honest disclosure of the facts should be given if HMRC’s advice is to be relied upon successfully.