Jurisdiction(s):
United Kingdom

Court of Appeal: FA 2003 s54(4) Case 3 requires successful group relief claim, but s75A counteracts scheme; SDLT charged on market value (Tower One St George Wharf v HMRC)

Published on: 15 December 2025

Published by a LexisNexis Tax expert

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Article summary

The Tower One St George Wharf Ltd v HMRC [2025] EWCA Civ 1588

A corporate group developed a residential scheme, with the concluding phase being the transfer of a 50‑storey tower block to a special purpose vehicle (SPV) to ring‑fence risks, contain potential liabilities and improve financial flexibility. After consulting tax advisers, the group executed a set of same‑day steps intended to ‘step up’ the tax cost of the project, so the SPV would be treated as acquiring it at market value without tax charges arising en route. In broad terms, the property‑owning company granted a 999‑year lease to another group entity, B64. The appellant, incorporated to serve as the SPV, then acquired the shares in B64, and the lease was subsequently transferred to it by way of distribution. After an HMRC enquiry, the appellant accepted the planning had not produced the anticipated tax advantage. HMRC then assessed the appellant to SDLT on the lease’s market value at the residential rate. The company appealed on the basis that it was a consequence of the internal, same‑day restructuring undertaken to transfer the asset at market value without interim tax, within the group’s wider development arrangements as originally contemplated by advisers...

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