Effect of transfer of rights by grant of option

In July 2011 the taxpayer who was chief executive officer of San Leon Energy plc participated in a stamp duty land tax avoidance scheme involving subsale relief. He bought a residential flat for £5m and at the same time as the contract for the acquisition of the property was completed granted a call option to San Leon for £100 under which the company could buy the flat for a market value consideration. However under the scheme the company would not exercise the option.

The taxpayer claimed that stamp duty land tax was not due because subsale relief applied. Further s 75A – which applied in Project Blue v CRC [2018] UKSC 30 – was not in point because there was no notional transaction.

HMRC said s 45 was not engaged or s 75A counteracted the scheme.

The taxpayer appealed.

The First-tier Tribunal held that the grant of...