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M and J Geering and others v HMRC

In M and J Geering and others v HMRC [2018] UKFTT 233 (23 April 2018) the FTT found that a stamp duty land tax (SDLT) scheme relying on FA 2003 s 45 failed.

The appeal concerned the purchase of two properties under a marketed ‘distribution in specie’ avoidance scheme similar to that used by the taxpayer in Vardy Properties [2012] SFTD 1398. The scheme worked as follows. The purchasers set up a company and subscribed for shares of a value equal to the deposit payable for the acquisition of the property. The company then exchanged contracts for the purchase of the property and resolved to distribute the property in specie on completion of the purchase as part of a reduction in capital. In preparation for completion further shares were subscribed for in exchange for a promissory note which was an undertaking to pay the completion monies....

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