The Tower One St George Wharf Limited v The Commissioners for HMRC
Decision date: 30 April 2022
Neutral citation: [2022] UKFTT 154 (TC)
Overall AI summary confidence: high
Short overview
This short overview is intended to summarise the case, issues and outcome so far as they are supported by the judgment.
AI confidence in this short overview: high
This appeal challenged HMRC’s SDLT discovery assessment following a pre-planned series of transfers that resulted in a 999‑year lease being held by the Appellant. The First‑tier Tribunal found there had been no sub-sale under s45, refused group relief under paragraph 2(4A) of Schedule 7 because the steps formed part of arrangements one of whose main purposes was tax avoidance, and applied the deemed market value rule (s53) (Case 3 exception in s54(4) did not exclude it because a group relief claim had been made). The Appellant’s appeal was dismissed and SDLT was assessed on market value.
Ratio decidendi
This summary is intended to identify the ratio decidendi, meaning the legal reasons for deciding and the binding part of the decision.
AI confidence in this ratio decidendi summary: high
The binding reasoning is that the tribunal will judge whether steps form “arrangements” whose main purpose is tax avoidance by reference to the arrangements as a whole (their intended effect), not the taxpayer’s subjective motive, and that paragraph 2(4A) Schedule 7 can therefore deny group relief where transactions are part of a broader pre‑planned scheme with avoidance as one of its main purposes. The tribunal also held that s45 does not treat the original contract as between the original vendor and a later transferee where there was no assignment or sub‑sale conferring legal rights prior to the vendor’s acquisition, and that the statutory trigger in s54(4)(b) for Case 3 is the fact a group relief claim was made by the vendor within the relevant period.
Obiter dicta
This summary is intended to identify obiter dicta, meaning observations made by the way that were not necessary to deciding the case and are not binding.
AI confidence in this obiter dicta summary: medium
The tribunal observed (obiter) that purpose may be inferred from how arrangements were devised and presented by professional advisers, and that reading a requirement of “validly” into s54(4)(b) would be impracticable because the provision operates on whether a claim was made, not on whether it was entitled to be made.