In the case of HC-One No 1 Ltd v HMRC [2026] UKFTT 678 (TC), in a lengthy judgment the FTT has upheld the appeal against discovery assessments and determinations charging SDLT on a group reorganisation.
SDLT – (1) whether the solvent liquidation of a company above the vendor of property subject to group relief within 3 years pursuant to paragraph 4(4) Schedule 7 Finance Act 2003 represents tax avoidance – no – targeted anti avoidance provisions contained in paragraph 2(4A) Schedule 7 Finance Act 2003 thereby not triggered – appeal against associated assessments allowed.
(2) whether liquidation (referred to above) and subsequent share sale “involved in connection with” disposal by OpCos and acquisition by Appellant under section 75A Finance Act 2003 – no – section 75A therefore providing no justification for notices of determination in connection with any notional transaction – appeal against determinations allowed.
(3) obiter dicta view expressed on ancillary matters concerning (a) main purpose, (b) whether assessments issued without adjustment for chattels valid, (c) whether block assessments valid and (d) concerning matters of quantum calculation.
The FTT summarised HMRC’s position as:
“The central question in this appeal is whether SDLT was due on or by reference to the intra-group transfers.. HM Revenue & Customs (HMRC) issued ten discovery assessments (Assessments)(pursuant to paragraph 28 Schedule 10 (para 28) FA 03) on the basis that group relief claimed under Schedule 7 (Sch 7) Finance Act 2003 (FA 03) was not available and ten revenue determinations (Determinations)(pursuant to paragraph 25 Schedule 10 (para 25) FA 03)on the basis that s75A FA 03 (s75A) applied. They contend, first, that the intra‑group transfers formed part of arrangements of which a main purpose was the avoidance of SDLT, such that the targeted anti‑avoidance provision in Sch 7 paragraph 2(4A) (para 2(4A)) applies. Secondly and in the alternative, HMRC rely on s75A, asserting that the intra‑group transfers, the liquidation, and the subsequent sale constitute “scheme transactions” which together yield less SDLT than a notional transaction would require.”
The FTT summarised the issues that required determination as:
“(1) whether group relief is denied by reason of the Sch.7 (Main Purpose Issue);
(2) whether s75A applies to recharacterise the intra‑group acquisitions (Involved Issue);
(3) whether the Assessments were lawfully made because HMRC made assessments for sums that they did not genuinely consider to be due (Assessment Validity – Deliberate Over Assessment Issue);
(4) whether some of the Assessments were unlawfully made because they were made on a global basis and not in respect of individual chargeable interests (Assessment Validity – Block Assessments Issue);
(5) if the Assessments were validly made, the correct method for determining chargeable consideration (Quantum Issue).”
The FTT summarised its judgment as:
“(1) Group relief was available to the Appellant when claimed and the appeal succeeds on the Main Purpose Issue.
(2) Section 75A does not apply to recharacterise the intra-group acquisitions and the appeal succeeds on the Involved Issue.
(3) The Assessments were validly made both on best judgment grounds and on the basis that having made a return as if the linked transactions between the same vendor and purchaser were a single transaction it was appropriate for HMRC to assess on the basis that there was a single transaction for each OpCo. I would therefore have refused the appeal on the Assessment Validity – Deliberate Overassessment and Block Assessments Issues.
(4) Again, although unnecessary for the determination of the appeal, I have determined the Quantum Issues on one hypothesis against the Appellant and in the second hypothesis in the Appellant’s favour.”
https://caselaw.nationalarchives.gov.uk/ukftt/tc/2026/678
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