Olu Olufote v The Commissioners for HMRC
[2023] UKFTT 130 (TC)
G Goldsmith Limited & Anor v The Commissioners for HMRC
18 October 2024
[2024] UKFTT 927 (TC)
First-tier Tribunal
A brother bought a house, then transferred ownership to his company before fully paying. HMRC tried to tax both him and the company, but the court ruled that only the company should pay, because the brother didn't fully take ownership of the house first. He could have avoided a second tax bill but didn't fill out the right paperwork, so he had to pay anyway. The company got some tax back because it was making flats in the house.
Key Facts
- •G Goldsmith Limited (the Company) and Mr Gia Goldsmith (Mr Goldsmith) appealed SDLT assessments on the purchase of a property.
- •Mr Goldsmith initially contracted to buy, then assigned the contract to the Company before completion.
- •HMRC argued Mr Goldsmith substantially performed the contract before assignment, triggering SDLT liability.
- •HMRC also claimed SDLT under a notional land transaction, but confirmed they would not seek both amounts.
- •The Company claimed Multiple Dwellings Relief (MDR).
- •Both appeals were late but permission was granted.
- •Extensive refurbishment work was undertaken before completion, but the timing and extent were disputed.
- •Conflicting evidence was presented regarding the commencement and nature of the works.
- •The Appellants initially claimed work started post-exchange, then amended to claim it started later.
- •The invoices from the builder were inconsistent and contained contradictions.
Legal Principles
Substantial performance of a contract under section 44 Finance Act 2003.
Finance Act 2003, section 44
Pre-completion transactions and assignment of rights under Schedule 2A Finance Act 2003.
Finance Act 2003, Schedule 2A
Multiple Dwellings Relief (MDR) under Schedule 6B Finance Act 2003.
Finance Act 2003, Schedule 6B
Validity of discovery assessments under Schedule 10 Finance Act 2003.
Finance Act 2003, Schedule 10
Time limits and method of claiming relief.
Various sections of the Finance Act 2003 and case law.
Outcomes
Company's appeal allowed.
Company entitled to MDR; paid correct SDLT after relief.
Mr Goldsmith's appeal partially allowed.
Not liable for SDLT under section 44(4); but liable for SDLT on notional land transaction due to failure to claim relief under Schedule 2A, paragraph 15.
Mr Goldsmith's claim for MDR dismissed.
Did not make a valid claim for relief within the time limit.