SDLT Subsale Relief & Section 75A: Robinson v HMRC Insights

On 3 January 2025, the First-tier Tribunal (FTT) struck out the appeal of William David Robinson and Maria Francis McAllister (the “Appellants”), upholding HMRC's closure notice assessing Stamp Duty Land Tax (SDLT) of £19,997 on their purchase of residential property. The FTT concluded that the subsale scheme involving connected parties and annuity consideration had no reasonable prospect of success as it constituted tax avoidance arrangements caught by Section 75A of the Finance Act 2003 (the “Act”). 

In March 2016, the appellants entered into a contract to purchase residential property from the vendors for £599,950 with completion scheduled for 30 March 2016. Before completion, Mr Robinson agreed to sell 82% of his 99% equitable interest in the property to Mrs McAllister in return for an annuity valued at £496,878.59. Mrs McAllister agreed to pay Mr Robinson an annuity of £1,242.20. On 30 March 2016, the original contract completed with a single transfer document stating consideration of £599,950 and declaring the appellants held the property on trust as to 99% for Mr Robinson and 1% for Mrs McAllister. The appellants filed two SDLT returns self-assessing nil duty by claiming pre-completion transaction relief under Schedule 2A of the Act. HMRC opened enquiries and later issued a closure notice assessing SDLT of £19,997, which the appellants appealed. 

The FTT was required to determine whether HMRC's application to strike out the appeal should succeed on the basis that the appeal had no reasonable prospect of success, specifically whether the sale of the equitable interest constituted a qualifying subsale eligible for relief under Paragraph 16 of Schedule 2A, whether the arrangements comprised tax avoidance arrangements within Paragraph 18, and whether Section 75A applied to create a notional transaction between the vendors and the appellants. 

The FTT granted HMRC's strike out application. FTT concluded that no pre-completion transaction existed within the meaning of Schedule 2A because no person other than the original purchasers became entitled to call for a conveyance of the property. The appellants, as original purchasers, remained the only persons entitled to call for conveyance both before and after the sale of the equitable interest. Even if a qualifying subsale had existed, relief was unavailable under Paragraph 18 because the arrangements clearly comprised tax avoidance arrangements, as obtaining a tax advantage was the main purpose or one of the main purposes of the appellants entering into the scheme. Furthermore, Section 75A applied because a number of scheme transactions were involved in connection with the disposal by the vendors and acquisition by the appellants, and the sum of SDLT payable in respect of scheme transactions was less than the amount payable on a notional land transaction.  

Read the full decision of Robinson & Anor v. HMRC [2025] UKFTT 00055 (TC) here.