Background
Christian Candy agreed to acquire two leasehold interests in Gordon House in Chelsea, including a 201-year lease for £48 million. Work commenced in August 2012, substantially performing the long-lease agreement for stamp duty land tax purposes. Candy filed a land transaction return and paid £1.92 million in SDLT on that agreement.
In April 2014, Candy transferred his interests to his brother Nicholas through a novation that released Candy from the original agreement and extinguished the parties’ obligations under it. Candy sought repayment because his substantially performed contract was not carried into effect. His claim under section 44(9) of the Finance Act 2003 ultimately failed because he had not amended his return within the applicable 12-month period. He also made a separate overpayment-relief claim under paragraph 34 of Schedule 10 within its four-year limit. The First-tier Tribunal allowed that claim, and HMRC appealed.
The Court’s Holding
The Upper Tribunal dismissed HMRC’s appeal. It held that section 44(9), which states that repayment under that provision must be claimed by amending the land transaction return, governs the procedure for obtaining relief under section 44(9). It does not exclude a separate claim for overpayment relief under paragraph 34 of Schedule 10.
Accordingly, the expiration of the 12-month period for amending Candy’s return did not itself bar his paragraph 34 claim. Paragraph 34 provides a distinct statutory route governed by its own requirements, exclusions in paragraph 34A, and four-year time limit in paragraph 34B. Permitting that route did not undermine the earlier ruling that Candy’s section 44(9) claim was out of time.
Key Takeaways
- A taxpayer’s failure to amend an SDLT return in time under section 44(9) does not automatically preclude overpayment relief under paragraph 34 of Schedule 10.
- The requirement that a section 44(9) repayment “must” be claimed by amendment applies to that statutory remedy, not to every other repayment route in the Finance Act 2003.
- Paragraph 34 is an independent remedy with its own four-year deadline and statutory exclusions, which must still be satisfied in each case.
Why It Matters
The decision confirms that the SDLT overpayment-relief regime can remain available after the shorter deadline for amending a land transaction return has expired. Taxpayers must nevertheless establish the requirements of paragraph 34 and overcome any applicable exclusion in paragraph 34A.
The ruling also distinguishes between a procedural limit attached to a specific repayment mechanism and a broader statutory prohibition on relief. HMRC cannot treat section 44(9)’s amendment requirement as implicitly eliminating the separate paragraph 34 remedy.