Case details

Project Blue Limited (Respondent) v Commissioners for Her Majesty's Revenue and Customs (Appellant)

Case ID: UKSC 2016/0137

Case summary

  1. 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?
  2. Which entity was the "vendor" referred to in s. 71A(2) of the FA?
  3. 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.

Judgment appealed

[2016] EWCA Civ 485



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