Property Tax Team: The role in STPG and lobbying HMRC

Dear all,

As part of being a member of the Stamp Taxes Practitioners Group, the property tax team are in a unique position to have confidential advanced sight of draft Stamp legislation and also draft HMRC manuals.

The purpose of this is to:

• Hold HMRC and the government to account when drafting legislation to ensure it is appropriate, proportionate and does not catch innocent transactions or create unnecessary complexities for UK taxpayers which are not in line with the intentions of parliament.
• Hold HMRC to account when drafting their internal manuals to ensure their position and view of the application of tax legislation is in line with parliament intentions, and ensure that users of the manuals are not misled with ambiguous guidance that produce incorrect determinations in tax cases.
• To understand what areas of complex tax legislation are causing difficulties in the courts and HMRCs approach to challenging in these areas at FTT, UT and CoA.

Examples of recent notable contributions the LB Property Tax team have made to the shaping of stamp taxes include:

• Having first sight of the abolition of Multiple Dwellings Relief (“MDR”) legislation and commenting on the proposed transitional rules with specific matters around linked transactions falling pre and post abolition of MDR.
• Having first sight of HMRC draft manuals for First Time Buyers Relief (“FTBR”) and commenting on the proposed wording, examples and position HMRC is taking in the application of FTBR, especially in complex cases that involve Settlements, Trustees and Beneficiaries for SDLT purposes.

We have also been alerted to a significant case in relation to property transfers to pension schemes and the purported relief that can apply under the partnership provisions and the sum of lower proportions in line with Schedule 15 of the SDLT legislation. This has been hotly debated over the years and some high profile SDLT sales people have purported to clients reliefs apply.

If your clients are transferring commercial property to SIPP or SSAS pension schemes, which can be a very positive tax planning strategy, then consider the impact on SDLT this case may have. More news to follow once the case decision has been published.

Finally, there have been a flurry of cases on high value residential properties with claims of mixed use on basis part of the land is not garden or grounds and therefore significantly less SDLT is due. HMRC are winning the majority of these cases but there have been a couple of significant taxpayer wins. Our property tax team have also made significant wins against HMRC in enquiries in this area too. Saving £100s of thousands for clients in tax due.

Uninhabitable dwellings are also a very hot topic currently. Watch this space for further HMRC enquiries and activity from the team…