Jurisdiction(s):
United Kingdom

Tower One (CA): SDLT—FA 2003 s 53 market value rule, s 54(4) Case 3 distributions, and s 75A notional aggregation (including share price) clarified

Published on: 22 December 2025

Published by a LexisNexis Tax expert

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Article summary

Tower One St George Wharf Ltd v HMRC [2025] EWCA Civ 1588 What are the practical implications of this case?

FA 2003, s 53 ordinarily requires SDLT to be computed by reference to the market value where property is transferred to connected companies. By contrast, FA 2003, s 54 sets out several departures from that market value basis. Under Case 3 in FA 2003, s 54(4), an exception applies if the transfer forms part of a distribution of the vendor’s assets and the property has not been within the scope of an SDLT group relief claim during the prior three years.

The Court of Appeal’s interpretation of FA 2003, s 54(4) confirms that Case 3 is only disapplied where SDLT group relief was actually obtained, and not merely claimed without success, contrary to HMRC’s position. Significantly, the Court of Appeal also upheld HMRC’s power to rely on FA 2003, s 75A, the general SDLT anti-avoidance rule, even if the Case 3 exception would otherwise be available. FA 2003, s 75A enables HMRC to disregard the real-world scheme steps and assess SDLT on a ‘notional’ composite transaction that aggregates all consideration received by the vendor or any connected person. The decision confirms...

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