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SDLT and sub sale schemes

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Fergus

Posted on:
23/08/13 12:11
Subject: SDLT and sub sale schemes

I wanted to know if, with all the recent activity by HMRC challenging sub sale SDLT schemes, you feel that this type of planning still works? If not, is their reason to believe the tide has turned in favour of HMRC and participants should be looking to settle with HMRC if they have the opportunity?
Patrick

Posted on:
28/08/13 09:18
Subject: RE: SDLT and sub sale schemes

Well we have the new pre-completion sub-sale rules introduced by FA 2013 so the former types of scheme that were intended to be used with the old s45 are no longer appropriate. As far as HMRC enquiries into old sub-sale schemes are concerned I think that these need to be looked at on a case by case basis before advising whether or not to settle.
Fergus

Posted on:
29/08/13 14:28
Subject: RE: SDLT and sub sale schemes

Thank you Patrick,

Does that also mean that historical SDLT cases based on old section 45 rules will also be deemed to be inappropriate or is it only cases written after the finance act?

thanks
Patrick

Posted on:
29/08/13 17:56
Subject: RE: SDLT and sub sale schemes

I'm note quite sure I understand your question but basically any pre-FA 2013 scheme that was done and is now under enquiry should be considered on its own merits in deciding whether or not to settle unless it was one of those that were retrospectively blocked. Any new type of scheme would have to pass muster under the new Sch 2A FA 2003 rules.
Sean Goodwin

Posted on:
30/12/14 22:34
Subject: RE: SDLT and sub sale schemes

Hi Patrick. I used the UCS scheme through Inventive Tax Strategies. I'm sure you know the new HMRC deadline for settlement agreement or challenge is close of business tomorrow 31st Dec 2014. If challenged, how long do you think it could take to resolve given the number of cases? Would HMRC pursue each individual case through court or more likely to get blanket ruling and apply broad brush? I'm tempted to settle but suspect challenge could take years to settle and not sure if HMRC would eventually give up once the size of each individual obligation got down to certain size. Would very much appreciate your thoughts. Thanks.
Patrick

Posted on:
31/12/14 09:39
Subject: RE: SDLT and sub sale schemes

Project Blue was done in early 2008 but we have only just received the judgment of the Upper Tribunal so that tells us something about how long these matters can take. You will also need to factor in the possibility of a follower notice coupled with an accelerated payment notice. Again I think that these may be open to challenge on various grounds and appealable (see for example the recent news item on the front of my website).
The Project Blue decision of the UT is also potentially quite helpful to other sub-sale scheme variants in that it confirms the technical integrity of the basic sub-sale structure but raises issues about s75A which may create difficulties in applying that section to other schemes including other Sharia schemes. A key issue will of course be the quality of implementation of the scheme.
My guess is that as things stand HMRC will not give up until every user is accounted for but ministers and managers change as do governments and and management priorities in five years time may be very different.

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