The taxpayers acquired the house using an arrangement under which the property was first sold to an unlimited company and then transferred by the company to the taxpayers as a distribution in specie. The taxpayers argued that the effect of FA 2003 s 45 was that the contract between the vendor and the company should be disregarded and that there was no consideration for the distribution from the company so no stamp duty land tax was payable. HMRC disagreed.
The First-tier Tribunal dismissing the taxpayers appeal had held that s 45 applied to the transactions but that the consideration chargeable to stamp duty land tax was equal to the amount contributed by the taxpayers to the company. Applying s 45(3)(b)(ii) this was the consideration for the transfer of rights in the property from the company. There was no consideration under the original contract between the...
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