Failed avoidance scheme

The taxpayer company agreed in April 2007 to buy the freehold of the Chelsea Barracks from the Ministry of Defence (MoD) for £959m.

The firm made a sale and leaseback agreement with a Qatari financial institution in January 2008.

The companies then entered into put and call options allowing the taxpayer to buy back the property at the end of a finance period of 999 years and two days.

The taxpayer said no stamp duty land tax (SDLT) was due. HMRC disagreed saying FA 2003 s 75A applied to the transaction. The department assessed the company to tax of £50m. The business appealed.

The First-tier Tribunal said the disposal of the property by the MoD and the grant of the lease by the Qatari financial institution to the taxpayer was a disposal and acquisition as set out in s 75A(1)(a).

The taxpayer was chargeable to SDLT in...