← Back to News
Stamp Duty avoidance clampdown ‘breaches human rights’, courts told
The Court of Appeal has thrown out an attempt to have Stamp Duty Land Tax anti-avoidance rules declared unlawful.
The claimants said the clampdown breached their human rights.
The Court did not agree with this argument and upheld an earlier decision by the High Court.
The case, while seemingly unrelated to money laundering, also highlights the role of offshore company structures as buyers of more expensive UK property.
The case was brought after legislation introduced by the Chancellor to shut down Stamp Duty avoidance schemes in 2012.
George Osborne said he would act retrospectively if necessary.
There have been various tax avoidance schemes, but the commonest has involved transferring ownership of a property to an offshore company.
The purchaser then buys the company, cutting the tax liability.
The appellants in the case had avoided paying Stamp Duty on their properties through one such scheme, devised by chartered accountants Blackfriars Tax Solutions.
They challenged the Government through a judicial review.
In court, they claimed that the Government’s actions represented an abuse of their rights under the European Convention on Human Rights to a fair trial and to protection of property.
At the Court of Appeal, Lord Justice Vos said: “The Government had made it perfectly clear that SDLT avoidance schemes … would not be tolerated, and that retrospective legislation would be used to achieve that objective.
“The appellants can have been in no doubt about any of that, before they decided to take advantage of a scheme devised purely to circumvent the precise wording of section 45(1A) as it was before the legislative changes.”
Jim Harra, director general for business tax at HMRC, said the case revolved around a blatant attempt to avoid paying Stamp Duty Land Tax.
He said: “This ruling puts all users of such schemes on notice that the legislation works as intended to stop these abusive schemes in their tracks, and we won’t hesitate to enforce the rules.”
At least £122bn worth of UK property is owned by offshore companies, where typically the names of company directors are not revealed.
As the recent From Russia With Cash programme on C4 claimed, some buyers may go to extraordinary lengths not to have their identities revealed in property transactions which may use “dirty money”.
The NAEA and RICS have not yet revealed results of their investigations following the programme, which appeared to show member agents turning a blind eye to anti money laundering law.
http://www.propertyindustryeye.com/stamp-duty-avoidance-clampdown-breaches-human-rights-courts-told/
