Summary

Relief from stamp duty land tax was not available in circumstances where the beneficial interest in the relevant property was owned jointly by a number of persons or bodies, only some of which were charities or Ministers of the Crown. The relevant land transaction for the purposes of stamp duty land tax was the acquisition of the whole beneficial interest in the property, and not each separate acquisition of an undivided share by each tenant in common.

Facts

The appellants (P and K), a trust company and a college, appealed against decisions made by the respondent Revenue denying partial relief from stamp duty land tax (SDLT) in relation to various property acquisitions.

P was the trustee of a trust for sale established under a will. Almost 75 per cent of the beneficial interest in the trust property, which comprised a large holding of commercial property in London, was held by a charity and a hospital, which was a Crown charity. P acquired four properties and claimed relief from SDLT in relation to the proportion of the properties beneficially owned by the charitable beneficiaries. K, a registered charity, contributed £175,000 towards the total purchase price of £378,000 for a leasehold interest in a flat acquired by one of its senior academic employees (T). That contribution was made on the basis of a shared equity scheme, whereby the leasehold interest was held on trust by T for himself and K as tenants in common in unequal shares. On appeal against the Revenue's refusal of the relief claimed in each case, the issue to be determined was whether relief from SDLT was available to a charity or a Minister of the Crown in relation to the acquisition of land in which the relevant purchaser acquired less than a 100 per cent interest.

P and K submitted that, in each case, the charitable beneficiaries had acquired an undivided share in land which constituted a separate chargeable interest for the purposes of the Finance Act 2003 s.48, such that each was party to a separate "land transaction" within s.43 and each was a separate "purchaser" for SDLT purposes by virtue of s.43(4) ands.43(6); accordingly, P and K argued, given their charitable status, relief was available in respect of each transaction under Sch.8 and, as regards the hospital, under s.107. The Revenue submitted that only one chargeable interest had been acquired in each case, not a number of purchases of separate chargeable interests, and that there were joint purchasers in relation to each purchase; accordingly, there was a joint obligation pursuant to s.103. The Revenue also argued that Sch.8 did not apply because the transactions involved non-charitable as well as charitable purchasers, so that the relief was not available even in relation to the charity's share.

Held

(1) Section 103 was concerned with a single land transaction, albeit one with the particular characteristic that two or more purchasers were jointly entitled. The reference to "a land transaction" was to a single land transaction and the reference to "the interest acquired" was to the single interest acquired as a result of that transaction. Section 103 was designed to deal with cases of multiple purchasers who became jointly entitled to the interest acquired. Thus, the general rules in s.103(2) applied so that the separate parties in the cases of P and K formed a single purchaser. There was no reason to treat a joint tenancy any differently from a tenancy in common in that context. Accordingly, the relevant land transaction for the purposes of SDLT was the acquisition of the whole beneficial interest in the property and not each separate acquisition of an undivided share by each tenant in common. The joint purchasers of the whole beneficial interest in P's case were the beneficiaries of the estate, and in K's case, K and T (see paras 35, 37, 43 of judgment). (2) The same principles applied when it came to applying charity relief; in particular,Sch.8 para.1(1) could not convert a land transaction comprising the acquisition of the entire beneficial interest by tenants in common into separate transactions and thus override the effect of s.103. Since the purchaser of the P properties was not solely a charity or a Minister of the Crown, and the purchaser of the lease in K's case was not solely a charity, the respective claims for relief from SDLT failed (paras 45, 76). (3) Reading s.43(1) with s.103, the relevant land transaction was the acquisition of the interest which the persons jointly entitled acquired between them, and nothing in s.43(4) or s.43(6) detracted from that conclusion (para.52). (4)Section 107(2) could not be read as if the exemption applied whenever the purchaser included a Minister of the Crown, as that would result in the exemption of the whole transaction even though the Minister might take only a small undivided share. Accordingly, the Revenue's construction of the legislation was to be preferred (paras 45-46).

Appeals dismissed