V Carter and another v HMRC

In V Carter and another v HMRC [2021] UKUT 300 (TCC) (1 December 2021) the Upper Tribunal (UT) held that an SDLT discovery assessment was valid. The taxpayers did not make an adequate disclosure in their return so HMRC could not reasonably be expected to be aware that the SDLT paid was insufficient.

The taxpayers implemented a sub-sale SDLT avoidance scheme. They submitted an SDLT return that contained a disclosure. The disclosure noted that the sub-sale rules in FA 2003 s 45 applied to the transaction so a percentage of the contract price was not chargeable consideration for SDLT purposes and that FA 2003 s 75A (anti-avoidance) did not apply to the transaction. HMRC did not raise an enquiry into the SDLT return but later raised a discovery assessment.

The FTT held that an officer of HMRC could not have been reasonably expected on the information made available to...