In the recent case ofThe Tower One St George Wharf Ltd, HMRC challenged the availability of SDLT group relief under the main purpose test in FA 2003 Sch 7, on the basis that the transaction formed part of arrangements with a main purpose of avoiding corporation tax – despite no tax actually having been saved. Finding in favour of HMRC, the FTT determined that the appellant had bona fide commercial reasons for entering into the transaction, but this was not sufficient to prevent the application of the TAAR. In addition, SDLT was due on the market value of the property under FA 2003 s 53 because a group relief claim (which turned out not to be valid) prevented the application of FA 2003 s 54(4).
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In the recent case ofThe Tower One St George Wharf Ltd, HMRC challenged the availability of SDLT group relief under the main purpose test in FA 2003 Sch 7, on the basis that the transaction formed part of arrangements with a main purpose of avoiding corporation tax – despite no tax actually having been saved. Finding in favour of HMRC, the FTT determined that the appellant had bona fide commercial reasons for entering into the transaction, but this was not sufficient to prevent the application of the TAAR. In addition, SDLT was due on the market value of the property under FA 2003 s 53 because a group relief claim (which turned out not to be valid) prevented the application of FA 2003 s 54(4).
If you are not a subscriber, subscribe now to read this content.
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