The Court of Appeal (the Court) has allowed the appeal in Project Blue Ltd v HMRC. It held that a Stamp Duty Land Tax (SDLT) anti-avoidance provision did not apply and £50 million of tax was payable, but it was not payable by the appellant. An SDLT relief for alternative property financing was not available for the bank that financed the purchase of the land. This was due to the fact that the purchase was a ‘sub-sale’, which meant that the SDLT anti-avoidance provision (s.75A FA 2003) did not apply – there was no tax saving. But HMRC had failed to assess the bank and they are now time-barred from doing so – making this a technical win for the taxpayer.
The decision had been expected to illuminate to some extent the application of section 75A, but aside from some passing remarks confirming some aspects of the controversial decision of the Upper Tribunal, it has not done so. Ironically, the reasoning for the Court of Appeal’s decision relies on a decision of the same Court in an SDLT avoidance case, DV3 RSL v HMRC (2013), which was for HMRC. Focus will now be on the Supreme Court to see whether it will grant HMRC leave to appeal, as leave to appeal has been denied by the Court of Appeal.