Project Blue Limited (Respondent) v Commissioners for Her Majesty's Revenue and Customs (Appellant)
Case ID: UKSC 2016/0137
- Was the Court of Appeal correct to allow the respondent to advance its argument on exemption under s. 71A of the Finance Act ("FA") 2003?
- Which entity was the "vendor" referred to in s. 71A(2) of the FA?
- Does s. 75A FA apply to impose tax on the respondent and, if so, what is the amount of the chargeable consideration?
This appeal arises from the acquisition of Chelsea Barracks from the Ministry of Defence ("MoD") by the respondent and the method of financing selected for it. The central question is whether the respondent is liable for stamp duty land tax in respect of the purchase. The scheme of transactions involved the respondent purchasing the freehold from the MoD and sub-selling this to Qatari Bank Masraf al Rayan ("MAR"). MAR then immediately leased Chelsea Barracks back to the respondent and these two entities entered into put and call options that would require or entitle the respondent to repurchase the freehold at the end of the finance period.
Each of the tax returns in respect of the six land transactions in the overall scheme recorded nil tax due. An HMRC enquiry was concluded by a closure notice amending the return in relation to the purchase of the freehold by the respondent from the MoD, stating the tax due to be £38.36 million. The respondent brought an appeal to the First-tier Tribunal, which it lost. Its subsequent appeal to the Upper Tribunal was successful in part, and it succeeded before the Court of Appeal, which allowed its appeal and dismissed HMRC’s cross-appeal.
Commissioners for Her Majesty's Revenue and Customs
Project Blue Limited
Lady Hale, Lord Carnwath, Lord Hodge, Lord Lloyd-Jones, Lord Briggs
Hearing start date
27 Feb 2018
Hearing finish date
28 Feb 2018