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Stamp Duty Land Tax (Avoidance Scheme)

Volume 563: debated on Tuesday 4 June 2013

The Government are today tabling an amendment to Finance Bill 2013 to put beyond doubt that a particular stamp duty land tax (SDLT) avoidance scheme is ineffective. The scheme uses the SDLT transfer of rights rules to avoid SDLT on the purchase of UK land. The legislation will have effect from 21 March 2012.

Because of repeated avoidance in this area, at Budget 2012 the Chancellor of the Exchequer made it clear that he would not hesitate to use retrospective legislation to close down future SDLT avoidance schemes.

Acting on this warning it was announced at Budget 2013 that legislation will be introduced in the Finance Bill to close down two schemes, which use the transfer of rights rules, with effect from the date of the Chancellor’s warning, 21 March 2012.

Since then a further transfer of rights scheme has been identified. The Government do not accept that the scheme has the effect intended but to remove any doubt, prompt action is being taken to protect the Exchequer.

Given the Chancellor’s clear warning last year and the announcement at Budget 2013 of retrospective legislation to close down similar transfer of rights schemes, if should have been obvious to both promoters and users of this scheme that it could be subject to retrospective action.

An updated tax information and impact note and guidance note are available on the HMRC website.