So long to sub-sale relief?

For years, sub-sale relief has allowed many to minimise double charges to Stamp Duty Land Tax (SDLT), and for others it has offered a convenient way to make substantial SDLT savings on transactions that in all other guises would be tantamount to a tax avoidance scheme. With this latter group in mind, changes have been brought in under the Finance Act 2013 to arm Her Majesty’s Revenue and Customs (HMRC) with a new set of powers to stamp out abuse of the system.

In its simplest form, a sub-sale or a ‘transfer of rights’, as it is termed under the SDLT rules, occurs when A contracts to sell some land to B and before that transaction completes B enters into an arrangement whereby C acquires the land in question. 

This outcome can be achieved in a number of ways; for example, B may assign the benefit of its contract to C, or A may transfer the land to B, who immediately transfers it to C. Strictly speaking, each of these transactions could give rise to two SDLT charges. However, this would amount to a double taxation burden and therefore, by virtue of the sub-sale relief rules, B, the middle-man, as it were, is relieved of its obligation to pay SDLT…

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