SDLT due on full purchase price

The taxpayer took part in a stamp duty land tax (SDLT) planning scheme on the purchase of a property – which the vendor sold to a limited company. Between exchange and contract the taxpayer was substituted as the purchaser by a deed of novation.

The consideration paid for the property was shown as £356 250 on his SDLT1 form the amount being that which he paid to the vendor under the deed of novation. The taxpayer claimed sub-sale relief under FA 2003 s 45 applied to the transaction.

HMRC disagreed and issued a discovery assessment on the basis the taxpayer was liable to SDLT on the full purchase price of £2.45m.

The taxpayer appealed.

Following the decision in Vardy Properties (TC2242) the First-tier Tribunal said the original contract had to be read as if the taxpayer had agreed to buy the property.

The company had never...