Key Facts
- •Redmount Trust Company Limited (appellant) appealed a First-Tier Tribunal (FTT) decision upholding HMRC's closure notice and discovery assessment for £294,000 in unpaid stamp duty land tax (SDLT).
- •The appellant used an avoidance scheme involving an agreement to grant an option to purchase property, aiming to utilize sub-sale relief under section 45(3) Finance Act 2003.
- •HMRC opened an enquiry into the appellant's land transaction return (the Return) on September 13, 2012, and issued a closure notice on September 7, 2016, amending the Return to reflect the SDLT due.
- •The appellant argued the Return was 'voluntary' as no SDLT was due under the (initially) effective scheme, rendering the enquiry and closure notice invalid.
- •Finance Act 2013 retrospectively amended section 45(1A) of Finance Act 2003, rendering the avoidance scheme ineffective.
- •The appellant challenged the retrospective amendment's legality but was unsuccessful.
Legal Principles
Duty to deliver a land transaction return.
Finance Act 2003, section 76
HMRC's power to open an enquiry into a land transaction return.
Schedule 10, Finance Act 2003, paragraphs 12 and 13
Scope of HMRC's enquiry into a land transaction return.
Project Blue Ltd v HM Revenue & Customs [2018] UKSC 30
Time limits for assessments under Schedule 10, Finance Act 2003.
Schedule 10, Finance Act 2003, paragraph 31
Retrospective effect of deeming provisions.
Marshall (Inspector of Taxes) v Kerr [1993] STC 360
Outcomes
Appeal dismissed.
HMRC was entitled to open an enquiry into the Return, even if it was not strictly required, as a 'protective' return. The closure notice was not out of time; the four-year time limit in Schedule 10, paragraph 31(1) applies only to discovery assessments, not closure notices.