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Mainly ignored? The main purpose test for SDLT group relief

Helen Coward (Charles Russell Speechlys) examines the decision in The Tower One St George Wharf Ltd concerning the SDLT group relief anti-avoidance rule.

Main purpose tests (found in targeted anti-avoidance rules or ‘TAARs’) are a mainstay of modern tax legislation though there are relatively few TAARs in the SDLT regime. One such TAAR is found in Part 1 of FA 2003 Sch 7 which contains the provisions for group relief from SDLT. This often-overlooked TAAR denies the availability of group relief from SDLT where the transaction is not effected for bona fide commercial reasons or where it forms part of arrangements of which a main purpose is the avoidance of tax.

In this context unlike the general position in FA 2003 ‘tax’ includes more than just SDLT: arrangements with a main purpose of saving income tax capital gains tax corporation tax and stamp duty...

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