Victory on costs is bitter sweet

The taxpayers had used stamp duty land tax avoidance schemes known as ‘sub-sale relief. HMRC failed to open enquiries into the taxpayers’ stamp duty land tax returns within the statutory enquiry window so it raised discovery assessments (FA 2003 Sch 10 para 28) on the basis that relief was not due.

The assessments were outside the normal time limits and therefore required HMRC to prove the taxpayers had not taken reasonable care. On this HMRC asserted the taxpayers had acted negligently by not submitting an amended stamp duty land tax return after the retrospective statutory amendment to FA 13 s 194. The taxpayers appealed.

In an earlier decision (TC8239) allowing the taxpayers’ appeal the First-tier Tribunal said HMRC had not done shown the taxpayers had acted negligently. Indeed the judge concluded: ‘The possibility that retrospective legislation might require you to revisit a...