Stamp duty land tax correctly charged on transaction

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. HMRC disagreed and the First-tier Tribunal dismissed the taxpayer’s appeal. The taxpayer appealed.

The Upper Tribunal noted that HMRC was seeking to revive its argument that the option was not an assignment subsale or other transaction within FA 2003 s 45(1)(b) – which had...