UK Property News
The Worrying Case of HMRC’s Disappearing Guidance
David Hannah, Group Chairman of Cornerstone Tax, discusses the importance of visibility for those navigating the bewildering landscape of SDLT
July saw HMRC issue an update to their regularly moderated Stamp Duty Land Tax Manual. The subject of this amendment being a particular section – SDLTM 00385 – dealing with the Revenue’s view of the factors that need to be considered when judging suitability for uses of dwelling or “uninhabitability”. The changes to the guidance appear to have removed reference to The Housing Health and Safety Regulations (HHSR) 2005 and particularly the words “would have received a prohibition notice”.
These references were previously useful tools used by taxpayers and advisers to benchmark whether a property is suitable for use as a dwelling. Many SDLT refund firms have relied on HSSR 2005 in order to assess reclaims for stamp duty. It may be the case that HMRC have intentionally hidden these pieces of guidance as they could have opened the door to further SDLT claims.
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HMRC take the view that their guidance is there for the benefit of taxpayers and regularly make claims against taxpayers and their professional advisors where “guidance was not followed”. Arguably, this is undermined by the fact that HMRC are able to edit their guidance in a bid to favour themselves, thus lacking impartiality and openness.
Regrettably, the same approach appears to have been taken with regard to case law, which should rank above HMRC guidance as it is the courts view of the law and, indeed, is binding on all parties in all cases, once a case is decided at the Upper Tier or beyond.
Broadly speaking, HMRC are only putting into their guidance cases that they have won, with guidance failing to mention the recent First-Tier Tribunal cases of Davis and Guilbert, which was decided in favour of the taxpayer and indeed the Mudan case which, whose appeal before the Upper Tier has just been heard and judgement is awaited. Both of these dealt with the issue of habitability.
David Hannah, Group Chairman of Cornerstone Tax, is available to comment further on the following:
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The ongoing debate for what constitutes as uninhabitable in matters concerning SDLT.
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Why blogs and articles by HMRC, The Law Society and the CIOT, which aim to avoid making claims that deter legitimate ones, demonstrate the deep concerns of these parties that such issues are frequently overlooked by non-specialised professionals.
David Hannah, Group Chairman
