Court upholds landmark ruling against tax avoidance
HM Revenue & Customs (HMRC) has protected up to £123 million in tax after a tax tribunal upheld a landmark ruling against a stamp duty land tax avoidance scheme.
In July 2013, the HMRC won a case against Project Blue, which used the scheme. According to the HMRC the scheme attempted to eliminate all stamp duty on the purchase of Chelsea Barracks in London.
Project Blue appealed against the First Tier Tribunal’s decision, but the appeal has now been rejected by the Upper Tribunal.
The Upper Tribunal has decided Project Blue must pay £38 million in stamp duty land tax that would have been due if it had not used the scheme.
The decision acts as a precedent to 24 similar commercial cases and similar avoidance schemes with around 900 users, protecting up to another £85 million in tax.
The stamp duty land tax sub-sale alternative finance scheme was used in an attempt to eliminate all of the tax due on the purchase of the barracks.
David Gauke (pictured), financial secretary to the Treasury, said that this case shows the HMRC’s has been backed twice by the courts.
‘The message is clear – tax avoidance is complex, expensive and self-defeating. We continue to crack down on both avoidance and evasion – last year HMRC’s compliance activity brought in £23.9 billion.’
