SDLT In Budget 2011

Preventing Avoidance

Legislation will be introduced in Finance Bill 2011 to make three changes to ensure or put beyond doubt that certain stamp duty land tax avoidance schemes are ineffective. The changes affect:

the relationship between the rules on sub-sales and the Alternative Finance reliefs; the definition of a 'financial institution' for the purposes of the SDLT Alternative Finance reliefs; and the way the consideration is determined where land is exchanged. The first measure renders ineffective schemes that employ the combination of a sub-sale and alternative finance reliefs. Currently, as you know, where a sub-sale is structured correctly the transaction between A and B is ignored and SDLT is chargeable if at all on the acquisition by C, who acquires the property under the sub-sale, only. So schemes had been structured whereby B (a private individual) sub-sold to C (typically a Channel Island protected cell company)...