On 20 March 2013 HMRC published guidance on retrospective changes to s45 of the Finance Act 2003.
The amendments to s45 will apply to transfers of rights entered into on or after 21 March 2012 but before the date on which the Finance Bill receives Royal Assent. They will be superseded by revisions to the transfer of rights rules in s45 FA 2003, which will have effect for transfer of rights entered into on or after the date on which the Finance Bill receives Royal Assent.
This is retrospective legislation and may well excite the interest of Human Rights lawyers – retrospective legislation is generally frowned upon by Europe regardless of the “warnings” given that Mr Osborne would not hesitate to use it. The amendment to s45 introduced by the last Finance Act was sloppy, merely tinkered with the legislation and left the effectiveness of “subsale” agreements to minimise or avoid SDLT in tact, albeit after some adjustment to the schemes concerned.
HMRC states in this guidance that it believes such schemes do not achieve the result they intend. But rather than challenge them properly, that is allow judicial scrutiny by the Tax Chamber, the Government has decided to “put matters beyond doubt” and change the law – retrospectively. This, in my opinion, is tantamount to admitting they got it wrong last year.
Our instinct as human beings and the underpinning ethos of capitalism is to maximise our resources. Relying on individual “moral conscious” to reduce tax avoidance (especially by a Tory administration with “privilege” stamped through it like Brighton rock) is just bad government. The answer isn’t to amend legislation retrospectively but to get it right in the first place.
Any hoo, those who have availed themselves of the shelter provided by SDLT schemes promulgated since 21 March 2012 have until 30 September 2013 to notify HMRC.
You can access a copy of the guidance here