DV3 RS Limited Partnership v Commissioners for Her Majesty's Revenue and Customs
Decision date: 23 February 2011
Neutral citation: [2011] UKFTT 138 (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 case concerned whether s45(3) Finance Act 2003 creates a notional secondary (A–B–C) contract that displaces a simple B–C contract for SDLT where an A→B and B→C sale complete contemporaneously, and whether Schedule 15 para 10 applied to the purchaser CC. The Tribunal held s45(3) does create such a composite secondary contract whose completion is the contemporaneous A→B and B→C actions, and that para 10(2) applied so that CC’s chargeable consideration was nil. The appeal was allowed and no SDLT arose on CC’s acquisition.
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 ratio is that s45(3) operates by treating a notional secondary contract (a tripartite A–B–C contract) as the single land transaction to be taxed where the original and secondary contracts complete contemporaneously, and that the completion of that secondary contract comprises the composite contemporaneous transfers/payments by A, B and C; accordingly Schedule 15 para 10 can apply to the composite transaction, here yielding nil chargeable consideration.
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 the Alternative Finance exception in s45(3) (s73) supports an interpretation that Parliament envisaged the secondary contract and its completion being capable of description as a sale by B to C for relevant provisions. It also noted, without deciding, that if there is no contemporaneous completion the secondary contract may have no effect or may revert to the ordinary B–C contract.