Right not yet in force

The taxpayer company was formed by long leaseholders in a block of residential flats in order to acquire the freehold and head lease under the right of collective enfranchisement under the Leasehold Reform Housing and Urban Development Act 1993 s 1(1)(a).

After completing the two transactions and paying the stamp duty land tax the company claimed relief from SDLT. HMRC decided to enquire into the returns of the company and on closing the enquiry refused the claim for relief.

The company appealed but the Special Commissioner dismissed the appeal saying that before Commonhold and Leasehold Reform Act 2002 ss 121 to 125 were brought into force there could be no right of collective enfranchisement exercisable by an RTE company within the meaning of FA 2003 s 74(4)(b). This led the commissioner to conclude that s 74 could not apply until ss...