The complexity of the SDLT legislation means that there are dangers of
inadvertently creating an SDLT charge when none was anticipated. Three
circumstances worthy of particular mention are:
- where land is transferred to a connected company by an individual.
Problems typically arise when this is done for commercial reasons, rather
than tax-planning reasons, because the CGT rollover relief rules suggest
that there should also be no SDLT charge. Instead, there is a market
value charge under s53 FA 2003;
- where a seller sells land as part of a mixed-use development under an
arrangement whereby the seller is to obtain a leaseback of a commercial
unit. This will be in exchange and the seller will be chargeable to SDLT on
the market value of the leaseback element (s47);
- substantial performance will accelerate an SDLT charge before the date
of completion, even when there is no intention to avoid tax.
Source: Stamp Duty Land Tax (Michael Thomas, 2nd edition, Cambridge £85).
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October 2006 |
