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HMRC internal manual

Stamp Duty Land Tax Manual

Section 75A Finance Act 2003: Section 75A Finance Act 2003: Section 75A Finance Act 2003, Overall approach

Section 75A is an anti-avoidance provision. HM Revenue & Customs (HMRC) therefore takes the view that it applies only where there is avoidance of tax. On that basis, HMRC will not seek to apply s.75A where it considers transactions have already been taxed appropriately.

The General Anti Abuse Rule (GAAR) (HMRC website), (external users can find the guidance at introduced from 17 July 2013 when the Finance Act 2013 was passed, applies to SDLT.

Section 75A applies where:

  • One person (‘V’) disposes of a chargeable interest, and another person (‘P’) acquires, that interest, or a chargeable interest derived from it (s.75A (1) (a)).
  • A number of transactions (‘scheme transactions’), including the disposal and acquisition, are involved in connection with the disposal and acquisition (s.75A (1) (b)).
  • The total Stamp Duty Land Tax payable in respect of all the scheme transactions is less than the amount that would be payable on a notional land transaction effecting the acquisition (s.75A (1) (c)).

All of the above must be read together.

Where it applies, the effect of s.75A is as follows:

  • The individual scheme transactions are disregarded for Stamp Duty Land Tax purposes.
  • There is instead a notional transaction effecting the acquisition of V’s chargeable interest (that is the chargeable interest which was the subject matter of the disposal by V) by P.
  • The chargeable consideration on the notional transaction is referred to as the ‘notional consideration’.
  • The effective date of the notional transaction is the last date of completion of the scheme transactions or, if earlier, the last date on which a contract in respect of the scheme transactions is substantially performed.