Court rejects bid to block Stamp Duty avoidance crackdown
The High Court has thrown out an attempt to challenge legislation introduced to tackle Stamp Duty Land Tax (SDLT) avoidance.
Retrospective legislation was announced in June 2013 to halt the Blackfriars avoidance scheme, which abused the SDLT transfer of rights rules to avoid paying SDLT on UK property purchases.
In court, the claimants sought to challenge the retrospective legislation by judicial review. The High Court refused permission to bring the judicial review, backing HM Revenue and Customs’ (HMRC) and HM Treasury’s. High Court judge Mrs Justice Andrews DBE said: “Parliament was entitled to decide that this was a case in which there was justification for making the legislation retrospective. Anyone in the claimants’ position who entered into the Blackfriars scheme did so at their own risk”.
The Blackfriars scheme was a variant of one closed down as part of a wider crackdown on SDLT avoidance introduced in the 2012 and 2013 Finance Acts. Overall, the measures introduced to block abuse of the transfer of rights rules are expected to result in additional SDLT of over £160m being collected for the public purse between 2013 and 2018.
Jim Harra, director general, business tax, HMRC, said: “Our commitment to stop this kind of Stamp Duty Land Tax abuse was made clear with the warning given by the Chancellor in Budget 2012 and the introduction of retrospective legislation to tackle the problem in the Finance Act 2013.
“Because of that, it should have been obvious to both promoters and users of this scheme that it could be subject to retrospective action. Our approach to tackling the scheme has now been backed by the courts.”