SDLT avoidance: novation and sub-sales — another win for HMRC

In the case of Edward Allchin v HMRC, the First-tier Tribunal has confirmed that the novation of a contract does not fall within the SDLT sub-sale relief provisions. Accordingly: another mass-marketed SDLT planning scheme has failed to achieve the results promised; this is the second success for HMRC in seven months; and the Tribunal emphasised that the onus is on the taxpayer, through the information provided, to alert HMRC of any insufficiency in the SDLT assessment.

This case falls under the current sub-sale rules set out in the Finance Act 2003. The Finance Act 2013 will introduce a new sub-sale regime that, as currently drafted, includes the novation of a contract within the ‘transfer of rights’ provisions…

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