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HMRC internal manual

Stamp Duty Land Tax Manual

From
HM Revenue & Customs
Updated
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Reliefs: Group, reconstruction or acquisition relief

Group relief: Withdrawal: Recovery from other persons FA03/SCH7/PARA5 and FA03/SCH7/PARA6

Once the Stamp Duty Land Tax (SDLT) due as a result of a withdrawal of group relief has been determined (whether by passage of time or closure of an enquiry or otherwise), liability to pay the tax is the responsibility of the purchaser.

Where such tax (or any part of it) has not been paid within a period of six months of the date on which it became payable, recovery of the unpaid amount is possible from other persons.

The persons from whom the SDLT may be recovered are

  • the vendor
  • any company which at any relevant time was a member of the same group as the purchaser and was above it in the group structure. For these purposes

    • any relevant time means any time between the effective date of the relevant transaction and the date the purchaser ceased to be a member of the same group as the vendor
    • a company (A Ltd) is above another company (B Ltd) in a group structure if B Ltd (or another company that is above B Ltd in the group structure) is a 75% subsidiary of A Ltd
  • any person who at any relevant time was a controlling director of the purchaser or of a company having control of the purchaser. For these purposes

    • any relevant time means any time between the effective date of the relevant transaction and the date the purchaser ceased to be a member of the same group as the vendor
    • director (in relation to a company) has the meaning given by ITEPA03/S67(1) and includes any person falling within Corporation Tax Act, CTA10/S452(1). controlling director (in relation to a company) means a director of the company who has control of the company in accordance with Corporation Tax Act, CTA10/S450 & 451.

To enable such a recovery, a notice must be served on the person from whom the tax is to be recovered. The notice

  • requires the unpaid amount of tax to be paid within 30 days of the service of the notice
  • must be served before the end of the period of three years beginning with the date on which the tax was finally determined
  • must state the amount of tax to be paid by the person on whom it is served
  • is to be treated as if it were an assessment and the tax was due from the person on whom it was served
  • has effect for recovery of the tax and any interest on the unpaid tax and also for the purposes of appeals

When the person on whom a notice was served has paid the tax (and interest), that person is legally entitled to recover the amount he paid from the purchaser.

No deduction is allowed in computing any income, profits or losses for any tax purpose for the amount so paid.