Olu Olufote v The Commissioners for HMRC
[2023] UKFTT 130 (TC)
Oisin Fanning v The Commissioners for HMRC
13 March 2023
[2023] EWCA Civ 263
Court of Appeal
Mr. Fanning tried to avoid paying stamp duty tax by saying he gave someone an option to buy his flat. The court said that didn't work because the option didn't mean the other person actually owned the flat yet, so the tax still had to be paid.
Key Facts
- •Mr. Fanning purchased a flat for £5,200,000, allocating £200,000 to chattels.
- •Simultaneously, he granted San Leon Energy plc an option to purchase the flat for £100, exercisable between 2016 and 2031.
- •Mr. Fanning argued this option prevented SDLT liability, as the option was the primary transaction.
- •HMRC issued a discovery assessment, upheld through various appeals until the Court of Appeal.
- •The case involves 41 similar appeals with over £4 million of tax at stake.
- •The relevant legislation is s.45 of the Finance Act 2003, concerning 'transfer of rights' in land transactions.
Legal Principles
Modern approach to statutory interpretation involves considering the purpose of the provision and interpreting language to best achieve that purpose.
Pollen Estate Trustee Co Ltd v HMRC [2013] EWCA Civ 753
A deeming provision should not produce unjust, absurd, or anomalous results unless compelled by clear language.
Fowler v HMRC [2020] UKSC 22
The grant of an option creates an immediate equitable interest in land.
London and South Western Railway v Gomm (1882) 20 Ch D 562 and Spiro v Glencrown Properties
SDLT aims to tax the person acquiring use and enjoyment of the property, reducing burden on those with transient interests.
R (oao St Matthews (West) and others) v HM Treasury [2015] EWCA Civ 648
Outcomes
Appeal dismissed.
The option was not a 'transfer of rights' under s.45(1)(b) because it didn't provide a present entitlement to a conveyance at the time SDLT was chargeable. The court rejected the interpretation that the option avoided SDLT entirely.
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