Higher rate of Stamp Duty Land Tax (SDLT) on purchases of additional residential properties - CIOT comments

6 Jul 2017

This had been a topic of discussion with HMRC through the R&D Consultative Committee for some time and HMRC was aware that the CIOT, and others, disagreed with HMRC‚ s view set out in a note circulated to RDCC members by HMRC in May 2015. Our letter set out in some detail the reasons and technical analysis as to why we disagreed with HMRC‚ s view and also our concern at the proposal that HMRC should amend the CIRD manual to reflect HMRC‚ s view. We have had a disappointing response from HMRC in which they confirmed their view and that they are preparing guidance to reflect it. Subsequent communication with HMRC has indicated that they are unwilling to engage further with us in any discussion around the technical analysis. Whilst, as indicated in our letter dated 14 August 2015, we understand that there are circumstances that have arisen in submitted claims that we appreciate would cause HMRC concern, we are of the view that if HMRC wishes to prevent reimbursed expenses (either entirely or expenses of a particular type) being included in R&D claims, the correct course is either to use the existing anti-avoidance provisions in the R&D tax code or to change the legislation. We would not have any objection to a change to the legislation to give effect to HMRC‚ s current view. However, our view remains that the existing legislation does not support the position HMRC is taking, as explained in our letter. We will have an opportunity to comment on HMRC‚ s guidance in due course.

Our letter, the note of May 2015 prepared by HMRC referred to above and in our letter, and HMRC‚ s response is available to view below in PDF format.

Techincal Team