No Human Rights breach in Stamp Duty tax avoidance challenge

AN ATTEMPT to have Stamp Duty Land Tax (SDLT) anti-avoidance rules declared unlawful has been rejected by the Court of Appeal.

It has been government policy since 2012 to pursue SDLT tax avoidance schemes retrospectively where necessary. However, some property buyers continued to use tax avoidance schemes to try and drive down their liabilities. As a result, the government brought in legislation to close schemes down.

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.

The Blackfriars scheme – devised by accountancy firm Blackfriars Tax Solutions – was one such scheme and some users of the scheme challenged the government’s action through a judicial review. They claimed that the government’s actions represented an abuse of their rights under the European Convention on Human Rights to a fair trial and to protection of property.

That claim, though, was thrown out in a ruling by Lord Justice Vos.

In summing up, he said: “The government had made it perfectly clear that SDLT avoidance schemes… would not be tolerated, and that retrospective legislation would be used to achieve that objective. The appellants can have been in no doubt about any of that, before they decided to take advantage of a scheme devised purely to circumvent the precise wording of section 45(1A) as it was before the legislative changes.”