14 January 2026

The Tower One St George Wharf Ltd v HMRC [2025] EWCA Civ 1588

The Court of Appeal dismissed the taxpayer’s appeal against the decision of the Upper Tribunal, finding that while the land transactions undertaken benefitted from the distribution exemption from SDLT in s54(4) of the FA 2003, SDLT was nonetheless due at market value under the anti-avoidance charging provision at s75A of the same Act.

Contrary to the Upper Tribunal and First-tier Tribunal’s conclusions, the Court of Appeal found that the distribution exception was available to the taxpayer as it had not made a “claim” for group relief within the meaning of s54(4)(b) in circumstances where group relief was ultimately denied.

Accordingly, it was not necessary to determine the taxpayer’s alternative argument that transactions entered into on the same day as the distribution did not take place within the three years immediately preceding the effective date of that distribution. Nonetheless, the Court addressed the argument shortly and disagreed with the taxpayer, applying familiar principles against construing legislation in a way that produces absurdity.

As the distribution exception applied, it became necessary to consider s75A. That provision was found to be engaged as the SDLT payable on a notional simple transaction of the chargeable interest was higher than that payable on the scheme transactions (albeit only very slightly). In reaching that conclusion, the Court accepted that: i) having a tax avoidance motive would disallow group relief for a notional s75A transaction just as it would a scheme transaction, ii) an intermediate share sale could be involved in connection with the transfer of a chargeable interest within s75(1), and iii) in computing the consideration on a notional s75A transaction any consideration received by the vendor or a connected party for the scheme transactions should be aggregated under s75A(5)(b).

This decision marks the second occasion that the complex anti-avoidance provisions of s75A-C have been subject to detailed judicial consideration at the appellate level following Project Blue v HMRC [2018] UKSC 30.

James Henderson and Arthur Wong acted for HMRC.

You can read a copy of the judgment here.