Necessary corrective action was not taken within the relevant timescale

In August 2011 Mr and Mrs S bought a farm in the name of a private unlimited company. The property was immediately transferred free of charge to Comtek Network Systems UK Ltd. This was a sub-sale distribution in specie scheme intended to avoid stamp duty land tax otherwise the couple would have been liable to pay duty at 4%.

After an enquiry HMRC assessed the company to tax of £22 000. Later in light of the First-tier Tribunal decision in Crest Nicholson (Wainscott) and others (TC5630) concerning a similar scheme it issued a follower notice and accelerated payment notice to the taxpayer. It imposed a penalty for failure to take corrective action against which the taxpayer appealed.

The taxpayer said a payment plan had been agreed with HMRC and it believed this was the end of the matter. Payments were made on time.

The First-tier Tribunal allowed the...