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Application for a closure notice

The taxpayers took part in a stamp duty land tax avoidance scheme marketed by C. The arrangement relied on FA 2003 s 45 to exempt from SDLT the purchase of residential property and FA 2003 s 71A to exempt the sale and leaseback transaction. The scheme was used by many other taxpayers.

HMRC opened an enquiry into the taxpayers’ SDLT returns. Subsequently it sent the taxpayers a settlement invitation. this stated that HMRC believed the scheme did not work and invited them to withdraw from it and settle. It requested several documents from the taxpayers.

The taxpayers’ adviser objected to the request but HMRC sent a second identical settlement offer to the taxpayers. They applied for a closure notice. HMRC said no such notice could be issued because it had insufficient documentation on which to base one.

The First-tier Tribunal agreed that HMRC...