“53 Deemed market value where transaction involves connected company (1) This section applies where the purchaser is a company and— (a) the vendor is connected with the purchaser… (1A) The chargeable consideration for the transaction shall be taken to be not less than— (a) the market value of the subject-matter of the transaction as at the effective date of the transaction, and (b) if the acquisition is the grant of a lease at a rent, that rent… (5) This section is subject to the exceptions provided for in section 54. 54 Exceptions from deemed market value rule (1) Section 53 (chargeable consideration: transaction with connected company) does not apply in the following cases. In the following provisions “the company” means the company that is the purchaser in relation to the transaction in question. (2) Case 1 is where immediately after the transaction the company holds the property as trustee in the course of a business carried on by it that consists of or includes the management of trusts. (3) Case 2 is where— (a) immediately after the transaction the company holds the property as trustee, and (b) the vendor is connected with the company only because ofsection 1122(6) of the Corporation Tax Act 2010 . (4) Case 3 is where— (a) the vendor is a company and the transaction is, or is part of, a distribution of the assets of that company (whether or not in connection with its winding up), and (b) it is not the case that— (i) the subject-matter of the transaction, or (ii) an interest from which that interest is derived, has, within the period of three years immediately preceding the effective date of the transaction, been the subject of a transaction in respect of which group relief was claimed by the vendor.”
“62 Group relief and reconstruction or acquisition relief (1) Schedule 7 provides for relief from stamp duty land tax. (2) In that Schedule— Part 1 makes provision for group relief, Part 2 makes provision for reconstruction and acquisition reliefs. (3) Any relief under that Schedule must be claimed in a land transaction return or an amendment of such a return.”
“3(1) Subject to sub-paragraph (2), where a person acquires a chargeable interest or an interest in a partnership as bare trustee, this Part applies as if the interest were vested in, and the acts of the trustee in relation to it were the acts of, the person or persons for whom he is trustee. (2) Sub-paragraph (1) does not apply in relation to the grant of a lease. (3) Where a lease is granted to a person as bare trustee, he is treated for the purposes of this Part, as it applies in relation to the grant of the lease, as purchaser of the whole of the interest acquired. (4) Where a lease is granted by a person as bare trustee, he is to be treated for the purposes of this Part, as it applies in relation to the grant of the lease, as vendor of the whole of the interest disposed of.”
“29. The courts in conducting statutory interpretation are ‘seeking the meaning of the words which Parliament used’: Black-Clawson International Ltd v Papierwerke Waldhof-Aschaffenburg AG[1975] AC 591 , 613 per Lord Reid. More recently, Lord Nicholls of Birkenhead stated: ‘Statutory interpretation is an exercise which requires the court to identify the meaning borne by the words in question in the particular context.’ (R v Secretary of State for the Environment, Transport and the Regions, Ex p Spath Holme Ltd[2001] 2 AC 349 , 396.) Words and passages in a statute derive their meaning from their context. A phrase or passage must be read in the context of the section as a whole and in the wider context of a relevant group of sections. Other provisions in a statute and the statute as a whole may provide the relevant context. They are the words which Parliament has chosen to enact as an expression of the purpose of the legislation and are therefore the primary source by which meaning is ascertained. There is an important constitutional reason for having regard primarily to the statutory context as Lord Nicholls explained in Spath Holme, p 397: ‘Citizens, with the assistance of their advisers, are intended to be able to understand parliamentary enactments, so that they can regulate their conduct accordingly. They should be able to rely upon what they read in an Act of Parliament.’ 30. External aids to interpretation therefore must play a secondary role. Explanatory Notes, prepared under the authority of Parliament, may cast light on the meaning of particular statutory provisions. Other sources, such as Law Commission reports, reports of Royal Commissions and advisory committees, and Government White Papers may disclose the background to a statute and assist the court to identify not only the mischief which it addresses but also the purpose of the legislation, thereby assisting a purposive interpretation of a particular statutory provision. The context disclosed by such materials is relevant to assist the court to ascertain the meaning of the statute, whether or not there is ambiguity and uncertainty, and indeed may reveal ambiguity or uncertainty: Bennion, Bailey and Norbury on Statutory Interpretation, 8th ed (2020), para 11.2. But none of these external aids displace the meanings conveyed by the words of a statute that, after consideration of that context, are clear and unambiguous and which do not produce absurdity...”
“31. Statutory interpretation involves an objective assessment of the meaning which a reasonable legislature as a body would be seeking to convey in using the statutory words which are being considered…”
“The particular charging or exempting provision must be construed in the context of the whole statutory scheme within which it is contained.”
“FA03/S54 provides that market value will not be imposed in any of the following circumstances where…the vendor is a company and the transaction is, or is part of, a distribution of assets, whether or not on the winding up of a company ‘This is provided that the subject matter of the transaction, or an interest from which that interest is derived, has not within the preceding three years been the subject of a transaction in respect of which a claim to group relief was made by the vendor.’ ‘It is not HM Revenue & Customs intention that FA03/S54(4) should be prevented from applying where a group relief claim was made by the vendor but recovered under FA03/SCH7/PARA3 either at the time of or before the effective date of the transaction.’”
“To apply the words literally is to defeat the obvious intention of the legislation and to produce a wholly unreasonable result. To achieve the obvious intention and produce a reasonable result we must do some violence to the words. This is not a new problem, though our standard of drafting is such that it rarely emerges. The general principle is well settled. It is only when the words are absolutely incapable of a construction which will accord with the apparent intention of the provision and will avoid a wholly unreasonable result, that the words of the enactment must prevail.”
“Subsection (4) provides an exception where the vendor is a company, and the transaction relates to the distribution of assets, including a distribution made in connection with the winding up of a company. It does not apply if the vendor has claimed group relief for the land on a transaction that has taken place in the three years prior to the transaction.”
“We are satisfied that a literal interpretation of section 77(5)(a) is anomalous to the explicit purpose of the Act. It could not have been intended that criminals have a day’s grace to dispose of their assets or to require either the prosecution, the enforcement agencies or the court to devise a scheme, outside the Act, to catch relevant assets. A literal interpretation of section 77(5) would require this.”
“(1) The extent of the fiction created by a deeming provision is primarily a matter of construction of the statute in which it appears. (2) For that purpose the court should ascertain, if it can, the purposes for which and the persons between whom the statutory fiction is to be resorted to, and then apply the deeming provision that far, but not where it would produce effects clearly outside those purposes. (3) But those purposes may be difficult to ascertain, and Parliament may not find it easy to prescribe with precision the intended limits of the artificial assumption which the deeming provision requires to be made. (4) A deeming provision should not be applied so far as to produce unjust, absurd or anomalous results, unless the court is compelled to do so by clear language. (5) But the court should not shrink from applying the fiction created by the deeming provision to the consequences which would inevitably flow from the fiction being real. As Lord Asquith memorably put it in East End Dwellings Co Ltd v Finsbury Borough Council[1952] AC 109 , 133: ‘The statute says that you must imagine a certain state of affairs; it does not say that having done so, you must cause or permit your imagination to boggle when it comes to the inevitable corollaries of that state of affairs.’” ‘The statute says that you must imagine a certain state of affairs; it does not say that having done so, you must cause or permit your imagination to boggle when it comes to the inevitable corollaries of that state of affairs.’”
“There is nothing in the body of the section which expressly or inferentially refers to motivation. The provision was enacted to counter tax avoidance which resulted from the use of a number of transactions to effect the disposal and acquisition of a chargeable interest. It is sufficient for the operation of the section that tax avoidance, in the sense of a reduced liability or no liability to SDLT, resulted from the series of transactions which the parties put in place, whatever their motive for transacting in that manner. This is clear from subsection (1)(c) which compares the amount of SDLT payable in respect of the actual transactions against what would be payable under the notional land transaction in section 75A(4), by which P acquired V’s chargeable interest on its disposal by V.”
“41. The Tribunal finds that at all material times the group of companies wanted to transfer the Tower to the Appellant in order to ring-fence risks and potential liabilities associated with the development, and to provide greater financial flexibility by opening up the prospect of securitized borrowing from a wider group of lenders. These were bona fide commercial reasons, that provided a commercial benefit. 42. The Tribunal is satisfied on the evidence that the group, when it first discussed with PwC the possibility of transferring the Tower to an SPV, was contemplating doing so for the reasons identified in the previous paragraph. The evidence of Mr Stearn is that he contacted PwC, the group’s principal tax advisers at the time, as the group was ‘seeking to ensure that transferring the development to an SPV would not give rise to adverse tax consequences’. The Tribunal is satisfied that the process that led to the series of transactions on5 July 2011 was not originally initiated out of a motive to avoid tax. The Tribunal is satisfied that if the group had never been made aware by PwC of the possible corporation tax advantage that could be obtained via the step plan, the group would likely have transferred the Tower directly from SGSL to the Appellant or another SPV in order to achieve its original purposes.”
“It seems to me that ‘payable’ must mean payable on the completion of the transaction which gives rise to the charge. The availability of the relief cannot depend on how the claim for relief is subsequently determined or dealt with by HMRC. The s.75A(1)(c) condition was not therefore satisfied in this case.”
“Since MAR’s liability to pay SDLT was a liability to pay on the basis of a direct sale from the MoD to it, it also follows that that amount of SDLT was no less than the SDLT that would have been payable by any one person by way of consideration for any of the scheme transactions described in section 75A. It follows, therefore, that the condition in section 75A(1)(c) is not satisfied. [Counsel for HMRC] argued that the reference to SDLT “payable” in section 75A(1)(c) meant falling due for payment, and that since HMRC had issued a closure notice to MAR accepting its claim to exemption under section 71A there was no SDLT “payable”, and therefore that condition was satisfied. There are, I think, two answers to this point. The first, given by [Counsel for the taxpayer], is that the question must be judged at the date of the notional transaction postulated by section 75A(4), whose effective date under section 75A(6) is the date of the last of the scheme transactions. That was long before HMRC issued its closure notice, with the result that the closure notice is irrelevant. The second is that ‘payable’ does not have a single meaning. It may mean ‘due for payment’, or ‘accruing due’ or ‘liable to pay’. In the context of section 75A(1)(c) I consider it means liable to pay (as that expression is used in section 85(1)). I do not consider that a mistake by HMRC in issuing a closure notice to one taxpayer can of itself impose liability on a different taxpayer if that is the reason why section 71(1)(c) is engaged.”
“the words ‘in connection with’ … are widely regarded as being as wide a connecting link as one can commonly come across”
“(a) if or in so far as it forms part of a process, or series of transactions, by which the transfer is effected, (b) if the transfer of the chargeable interest is conditional on the completion of the transaction, or…”
“If I can express it in my own words, one would normally say that use A is incidental to use B if it arises out of use B, something that is done because of use B, or in connection with use B, or as a by-product of use B. Using a laptop to write a shopping list does not arise out of using it to write opinions – it is an independent end in itself, unconnected with the writing of opinions, albeit no doubt very much a subordinate or secondary or lesser one.”
“I agree that it is difficult to regard use A as merely incidental to use B if it serves an independent purpose of its own, unconnected with use B, at any rate if that purpose is of some significance and not trivial or casual…”