Time is running on the HMRC consultation on proposals to change the stamp duty land tax rules on transfers of rights and sub-sales – see High-risk areas of the tax code: The Stamp Duty Land Tax transfer of rights or sub-sale rules. The consultation period runs until 9 October 2012. HMRC wishes to bring in changes to section 45 Finance Act 2003 in 2013 in order to prevent avoidance of SDLT. It says: “Attempts to abuse these rules have been at the heart of many SDLT avoidance schemes in recent years. Marketing and promotion of this abuse cannot be allowed to continue.” Although any changes will not be effective until next spring, the consultation paper warns that “promoters of SDLT avoidance schemes, and any buyers of residential property inclined to use them, should have no confidence that their schemes will be effective in the meantime.”
Possible options being considered by HMRC include:
– Introducing double-charging provisions where a sub-sale is involved, so that both the purchaser under the main contract, and the sub-purchaser under the sub-sale contract are involved in chargeable transactions, but providing a relief for the intermediate purchaser to be claimed on an SDLT return form.
– As above, but providing a relief only where an anti-avoidance test is satisfied.
– Providing for greater certainty in the terms of section 75A Finance Act 2003 (the wide-ranging SDLT anti-avoidance provision) to make it clear that it applies to section 45 Finance Act 2003.