SDLT relief not due on planning permission alone
Two appeals sought to determine whether planning permission was capable of satisfying the condition for dwellings being “in the process of construction” in order for multiple dwellings relief (MDR) to apply.
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"Bore holes are similar to the non-physical activities discussed in the Ladson case as title to them cannot be transferred between parties. As such, the bore holes cannot be characterised as the main subject matter of the transaction."
That part of the decision is of course total nonsense and yet another example of the FTT not understating very basic SDLT (and land law) stuff. The main subject matter of the transaction is simply the relevant freehold or leasehold etc. interest acquired per s43(6) FA 2003 and nothing more and nothing less and in any event of course the bore holes were acquired as a matter of fact with that interest, not being chattels.
https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdlt...
The overall decision is probably nevertheless right due to the absence of golden brick.
Sanity shown by FTT
Avoision shown as such.
Certain that my preferred place to live is not a bore hole.
Assuming GAAR is not in point, that's (supposed to be*) irrelevant per the following from the case below:
"The question is simply whether upon its true construction, the statute applies to the transaction. Tax avoidance schemes are perhaps the best example. They either work (Inland Revenue Commissioners v. Duke of Westminster [1936] AC 1) or they do not (Furniss v. Dawson [1984] A.C. 484.) If they do not work, the reason, as my noble and learned friend Lord Steyn pointed out in Inland Revenue Commissioners v. McGuckian [1997] 1 WLR 991, 1000, is simply that upon the true construction of the statute, the transaction which was designed to avoid the charge to tax actually comes within it. It is not that the statute has a penumbral spirit which strikes down devices or stratagems designed to avoid its terms or exploit its loopholes. There is no need for such spooky jurisprudence."
https://www.bailii.org/uk/cases/UKHL/1997/51.html
As endorsed in paras 37 & 38 with relatively minor (fairly self-evident) qualification re "true commercial reality" and tax avoidance motive here (arguably irrelevant to the above case): http://taxandchancery_ut.decisions.tribunals.gov.uk/Documents/decisions/...
*In practice bad (biased) judges overlook that spooky jurisprudence point of course and effectively apply such jurisprudence to avoidance schemes.
It would appear my above comments re FTT's general lack of knowledge of SDLT issues are part of a wider problem. See: https://www.lawgazette.co.uk/news/overstretched-and-under-resourced-tax-...
"‘Many survey respondents and interviewees suggested that some judges lacked either the technical knowledge or technical ability to hear the cases they were allocated,’ the research group said."
Interesting that they require substantial work to have been done to change the status of the property yet with planning permission one could , certainly before "commencement of development notices" were in use in Scotland, by accident change a property's planning status.
We had a property that was a licensed premise, the market being slack to lease same we applied for PP to create offices within the structure, we got the PP.
Whilst this was going on we did find a tenant willing to take the premises as licensed premises. Various works were then undertaken ( what we thought was renovation of a pub) however Edinburgh Planning argued successfully that given a PP for offices existed, and work had started , those works had changed the status of the property from a pub to offices and if we wanted it to be a pub we needed to now apply for change of use from offices (not that physically any offices yet existed) to licensed premises. We also could not with EDC vary the old licence, we had to apply for a brand new licence (luckily prior to the changes in the 2005 Act which now require one to demonstrate local need for any additional licensed premises)
There did not appear to be any consideration by the tribunal judges of the legislation at Paragraph 7 (sub-paragraph 5) of Schedule 6B FA 2003, and HMRC manuals - SDLTM29905, SDLTM29960 and SDLTM09520
The main subject-matter of a transaction is also taken to consist of or include an interest in a dwelling if—
(a) substantial performance of a contract constitutes the effective date of that transaction by virtue of a relevant deeming provision,
(b) the main subject-matter of the transaction consists of or includes an interest in a building, or a part of a building, that is to be constructed or adapted under the contract for use as a single dwelling, and
(c) construction or adaptation of the building, or the part of a building, has not begun by the time the contract is substantially performed.