DV3 and SDLT avoidance

The taxpayer won in the recent Upper Tribunal case on SDLT avoidance concerning sub-sale arrangements. But similar planning arrangements may not work today given the anti-avoidance measures in FA 2003.

The Upper Tribunal has found in favour of the taxpayer in the most recent instalment of the DV3 litigation (see HMRC v DV3 RS Limited Partnership [2012] UKUT (399) (TCC)). The judgment was accompanied with a note of caution: the SDLT planning used by DV3 may have been successful in 2006 but in the words of the tribunal ‘would probably’ be impacted today by the anti-avoidance provisions introduced since (specifically FA 2003 ss 75A–75C).

Unless HMRC successfully appeals this decision it looks like HMRC will have to base future decisions on s 75A rather than being able to challenge based on...