A tax on a tax: charging SDLT on VAT

Where VAT arises on the acquisition of a UK real estate interest, the chargeable consideration for the purposes of SDLT will be taken to include that VAT. In the case of cash consideration, the result is simple and unarguable: the VAT is subject to SDLT. Where the consideration takes the form of another land interest that is exempt from SDLT, it seems the Stamp Office expects the same outcome. The authors disagree: assuming the transaction is documented on a ‘VAT inclusive’ basis, they believe no SDLT is due.