Market value provisions apply when consideration is an annuity

In March 2016 the taxpayer bought a residential property from Mr and Mrs F who had control of the company. The taxpayer submitted a land transaction return showing consideration of £36 000 payable by 12 annuity payments of £3 000. The was below the minimum value for stamp duty land tax. After an enquiry HMRC amended the return to assess tax of £180 000 based on a market value of the property being £1.2m (FA 2003 s 53 ‘deemed market value where transaction involves connected company’).

The First-tier Tribunal dismissed the taxpayer’s appeal.

The question before the Upper Tribunal was whether the market value rule in FA 2003 s 53 did not apply when the consideration for the transfer was an annuity within s 52. Section 52 provides that when the chargeable consideration for a land transaction consists of an annuity the consideration is limited...