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No Human Rights Breach in Stamp Duty Avoidance Challenge

Press Release   •   Aug 06, 2015 12:03 BST

An attempt to have Stamp Duty Land Tax (SDLT) anti-avoidance rules declared unlawful has been firmly rejected by the Court of Appeal.

The Chancellor made clear in his 2012 Budget statement that he would act retrospectively against SDLT avoidance if necessary. Nevertheless, some property buyers continued to use tax avoidance schemes to try and avoid their liabilities. When this avoidance continued, the Government brought in legislation to close schemes down.

The Blackfriars scheme – devised by chartered accountants Blackfriars Tax Solutions LLP – was one such scheme and some users of the scheme challenged the Government’s action through a judicial review. 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.

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, said:

"HMRC and HM Treasury moved fast and effectively to defend anti-avoidance rules and counter a blatant attempt to avoid paying Stamp Duty Land Tax. 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."

Notes to editors:

1. The legislation the judicial review aimed to challenge was introduced in 2013 and applied back to March 2012, as part of a package of legislative measures that protected over £160 million of SDLT over the next five years. The Chancellor had warned in his 2012 Budget statement that he would act retrospectively if tax avoiders found ways around rules introduced to prevent SDLT avoidance.

2. The Chancellor said:

“Let me make this absolutely clear to people. If you buy property in Britain that is used for residential purposes, we will expect stamp duty to be paid. This is the clear intention of Parliament, and I will not hesitate to move swiftly, without notice and retrospectively if inappropriate ways around these new rules are found. People have been warned.”

3. The claimants argued that the legislation breached Article 1 of Protocol 1 (protection of property) and Article 6 (right to fair trial) of the European Convention on Human Rights (ECHR).

4. The scheme was designed to take advantage of the sub-sale rules for SDLT, using a complex transaction solely designed to reduce the amount of SDLT payable.

5. The title of the case is: The Queen on the Application of APVCO 19 Ltd and others and Her Majesty’s Treasury and the Commissioners for Her Majesty’s Revenue and Customs.

6. The judgment is online at:

7. This win for HMRC in the Court of Appeal follows an earlier win for HMRC in the High Court in 2014:

The High Court judgment is online at:

8. HMRC has issued three Spotlights which warn about SDLT Avoidance schemes:

- Spotlight 10: Stamp Duty Land Tax avoidance

- Spotlight 14: Stamp Duty Land Tax avoidance

- Spotlight 19: Stamp Duty Land Tax avoidance - update

9. Follow HMRC Press Office on Twitter @HMRCpressoffice.

10. HMRC's Flickr channel:

Issued by HM Revenue & Customs Press Office

HM Revenue & Customs (HMRC) is the UK’s tax authority.

HMRC is responsible for making sure that the money is available to fund the UK’s public services and for helping families and individuals with targeted financial support.