Billionaire wins £1.9 Million Battle Against HMRC

Christian Peter Candy, a billionaire property developer, has won a years-long legal battle against HMRC at the First-tier Tribunal (FTT) over a £1.92 million Stamp Duty Land Tax (SDLT) dispute. After years of proceedings, the FTT ruled in Candy’s favour. 

The Background

The dispute began as early as 2012, when Candy entered into two contracts totalling £68 million to acquire Gordon House, a London property owned by the Royal Hospital Chelsea. Prior to completion of the second contract, Candy undertook extensive renovations worth £27 million, including the installation of a cinema and a swimming pool. He paid £1.92 million in SDLT, as required under Section 44 of the Act, which treats Candy’s contractors beginning the construction work as a ‘substantial performance.’ The effect of the contract being substantially performed is that SDLT liability becomes due earlier than under a standard purchase, resulting in Candy's payment of SDLT in respect of both the completion of the first contract and the substantial performance of the second contract.

However, Candy later changed plans and transferred the property to his brother, rescinding his original contract. His brother finalised the renovations and completed the purchase.  This rescission created grounds for a refund of £1.92 million from HMRC, representing the SDLT overpaid under Section 44.

The Legal Battle Against HMRC

Candy’s initial attempts to reclaim the SDLT through amendments to his tax return were rejected by HMRC—a decision subsequently upheld by the Upper Tribunal (UT), and ultimately the Court of Appeal (the Court) in 2022. The Court determined that his claim under Section 44 was time-barred, having been filed outside the statutory 12-month amendment window.

Following the Court’s ruling, Candy pursued a secondary claim under Paragraph 34 of Schedule 10, which allows refunds for overpayments in cases where other claims were time-barred. Hence, the matter proceeded before the FTT.

The alternative legal argument in the present appeal centres around Paragraph 34 under Schedule 10 of the Act. The said provision permits claims for overpaid tax where no other statutory relief is available.

Upon entering the present appeal, it was undisputed between the parties that had the claim been timely, relief would have been available under Section 44(9). HMRC, however, contested the applicability of Paragraph 34, contending that Section 44(9) constituted the exclusive route for relief and that Candy’s failure to meet its procedural requirements barred recourse to any other remedy.

FTT, presided over by Judge Vimal Tilakapala, rejected HMRC’s interpretation. Analysing the legislation alongside the legislative history, Explanatory Notes and Technical Note of HMRC, the Judge characterized Paragraph 34 as a “backstop remedy”—designed to offer a final statutory recourse where all other relief provisions have been exhausted. This interpretation, Judge Tilakapala noted, aligns with the legislative intent to circumscribe common law claims that might otherwise arise in the absence of such a statutory mechanism.

The judgment clarified that Paragraph 34 functions independently of other relief avenues, ensuring taxpayers retain the ability to recover overpayments even when procedural time limits preclude alternative claims. Crucially, the mere existence of Section 44(9) does not, in itself, preclude a valid claim under Paragraph 34.

Conclusion: What This Means for Other Taxpayers

This ruling emphasises the flexibility of tax relief provisions to ensure fairness and equitable outcomes for taxpayers. This case may provide persuasive judicial guidance to future disputes involving SDLT overpayments and statutory interpretations.

This case also underscores the importance of seeking expert advice to meet procedural requirements and deadlines and navigate all possible avenues for relief.