The Pollen Estate Trustee Company Ltd and another v HMRC
| Jurisdiction | UK Non-devolved |
| Judgment Date | 03 August 2012 |
| Neutral Citation | [2012] UKUT 277 (TCC) |
| Date | 03 August 2012 |
| Court | Upper Tribunal (Tax and Chancery Chamber) |
[2012] UKUT 277 (TCC).
Upper Tribunal (Tax and Chancery Chamber).
Warren J, Judge Timothy Herrington.
Jonathan Peacock QC (instructed by Eversheds LLP) for the first appellant.
Andrew Hitchmough and Zizhen Yang (instructed by Mills & Reeve LLP) for the second appellant.
Amanda Tipples QC (instructed by the Solicitor to HM Revenue and Customs) for the Crown.
Stamp duty land tax - Reliefs and exemptions - Land transaction - Charities relief and Minister of the Crown exemption - Purchaser of land holding as bare trustee for tenants in common including charities and Minister of the Crown - Relevant transaction for applying charities and Minister of Crown relief acquisition of entire property - No entitlement to proportionate relief - Taxpayers' appeal dismissed - Finance Act 2003, Finance Act 2003 section 42 section 48 section 49 section 55 section 75A section 76 section 77 section 85 section 103 section 107 section 117 schedule 8 schedule 16ss. 42-44, 48, 49, 55, 75A, 76, 77, 85, 103, 107, 117, Sch. 8, 16.
These were appeals by the taxpayers raising the question whether the relief from stamp duty land tax (SDLT) for charities and the exemption for a Minister of the Crown were available in respect of the interests of a charity or Minister of the Crown where land had been purchased by a bare trustee for tenants in common including charities and a Minister of the Crown.
The first appellant had acquired properties and paid SDLT. It then sought repayment of a proportion of the SDLT on the basis that it was acting as bare trustee for tenants in common which included a charity and a Minister of the Crown, and that partial relief and exemption should be allowed under FA 2003, Sch. 8 and s. 107 in respect of the proportion of the properties attributable to their beneficial interests attributable to the charities and the Minister of the Crown.
HMRC refused the claim on the basis that relief from SDLT was only available in the case of joint purchasers where all of the joint purchasers were entitled to the relief; by virtue of FA 2003, Sch. 16, para. 3(1), where a land transaction involved a number of persons acquiring a property through a bare trust, the purchasers were treated as joint purchasers and the transaction was taxed as a single land transaction.
The second appeal raised a similar issue in respect of the acquisition of a lease by an individual who held it for himself and the second appellant, which was a charity. Both appeals were directed to be heard together in the Upper Tribunal.
Held, dismissing the appeals:
The relevant land transaction for the purposes of SDLT was the acquisition of the entire property and not each separate acquisition of an undivided share by each tenant in common. It followed that the relevant land transaction when it came to applying the charity relief or Minister of the Crown exemption was also the acquisition of the entire property. Dividing the relevant transaction (i.e. the acquisition of the entire beneficial interest by the tenants in common collectively) into separate land transactions would override the effect of FA 2003, s. 103. Reading s. 43(1) with s. 103, the relevant land transaction was the acquisition of the interest which the persons jointly entitled acquired between them. In respect of the acquisition of each of the properties and the lease, there was a single land transaction for the purposes of SDLT, namely the acquisition of 100 per cent of the beneficial interest in the property in question. There were joint purchasers of the whole of the beneficial interest acquired, namely, in the first appeal, the beneficiaries of the trust and, in the second appeal, the individual and the charity. Since the purchaser of the properties and the lease was not solely a charity or charities or a Minister of the Crown, the respective claims for relief and exemption from SDLT failed and the taxpayers' appeals were dismissed.
1.This is an appeal against decisions made by the Respondents ("HMRC") to deny partial relief from stamp duty land tax ("SDLT") claimed by the Appellants in respect of various property acquisitions. The relief had been claimed on the basis that the beneficial interest in the properties concerned was owned jointly (as tenants in common) by persons, one or more of which were either a charity or a minister of the Crown and one or more others who did not fall into either of these categories and relief should therefore be allowed in respect of the interests attributable to the charities or Minister of Crown concerned.
2.The first Appellant, the Pollen Estate Trust Company Limited ("PETCL"), appealed to the First-tier Tax Tribunal ("the Tribunal") against the decision made by HMRC in its Closure Notice dated 16 February 2010 issued under Finance Act 2003 schedule 10 subsec-or-para 23paragraph 23 of Schedule 10 to the Finance Act 2003 ("FA 2003") following the enquiries HMRC had made into the land transaction returns made by PETCL in respect of the acquisition of four properties in London. The decision was to refuse PETCL's claim for repayment of a proportion of the SDLT which PETCL had already paid in respect of these acquisitions. The basis of the claim for repayment was that as PETCL was acting as bare trustee for the beneficiaries of the Pollen Estate Trust ("the Pollen Estate") in making those acquisitions and since two of those beneficiaries are UK registered charities, partial relief should be allowed under Finance Act 2003 schedule 8Schedule 8 to the FA 2003 in respect of the 74.335301% proportion of the properties attributable to those charitable beneficiaries.
3.PETCL had also claimed that since one of the beneficiaries is Greenwich Hospital, whose assets are held by the Secretary of State for Defence in his capacity as trustee for the Queen holding all the land and property for the exclusive benefit of Greenwich Hospital, then the Minister of the Crown exemption should apply under Finance Act 2003 section 107section 107 of the FA 2003 in respect of the proportion of the properties attributable to Greenwich Hospital.
4.HMRC had refused the claim as their view was that relief from SDLT is only available in the case of joint purchasers where all of the joint purchasers are entitled to the relief; their view was that by virtue of Finance Act 2003 schedule 16 subsec-or-para 3paragraph 3(1) to Schedule 16 to the FA 2003 where a land transaction involves a number of persons acquiring a property through a bare trust the purchasers are treated as joint purchasers and the transaction is taxed as a single land transaction.
5.The second Appellant ("KCL") appealed to the Tribunal against the decision made by HMRC in its Closure Notice dated 28 September 2006 following enquiries HMRC had made into the land transaction return made by KCL in respect of the acquisition that a Professor Trembath, one of KCL's senior academic employees, had made of a property in London. The decision was to refuse KCL's claim for charities relief on a portion of the purchase price of the property. The basis of the claim for relief was that as Professor Trembath was acting as bare trustee for himself and KCL in making that acquisition and KCL was a UK registered charity, partial relief should be allowed under Finance Act 2003 schedule 8Schedule 8 to the FA 2003 in respect of the 46.3% proportion of the property attributable to KCL.
6.HMRC refused the claim on the basis of arguments similar to those made in respect of PETCL's appeal, as described in paragraph 4 above.
7.KCL's appeal was heard in the Tribunal on 16 and 17 February 2011. The decision on that appeal was released on 12 May 2011 but on 22 July 2011 Judge Bishopp, President of the First-tier Tribunal, Tax Chamber set the decision aside in its entirety in accordance with rule 38(1) of the Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009 and directed that the appeal be re-heard. Judge Bishopp also directed that KCL's appeal and that of PETCL henceforth proceed and be heard together. In addition, with the agreement of the parties and with the concurrence of the President of the Tax and Chancery Chamber of the Upper Tribunal, Judge Bishopp transferred the appeals to be heard in this Chamber as first instance hearings under rule 28 of those rules.
8.There is no dispute between the parties on the relevant facts. In relation to PETCL's appeal there is a statement of agreed facts and other background material submitted to us from which we find as follows:
(2) The Pollen Estate is a trust for sale established under the Will and Codicils of the Reverend George Pollen who died on 27 March 1812 and a Conditional Deed of Family Arrangement dated 17 August 1966 (as amended by Order of the Chancery Division of the High Court on 17 June 1968 and on 23 July 2002).
(3) PETCL is the current trustee of the Pollen Estate.
(4) The present beneficiaries, we are told, amount to a little over 100 in number, being the successors of the Reverend Pollen's children and grandchildren and who acquired their interest in the Pollen Estate either by inheritance, by gift or by purchase (the shares in the Pollen Estate being freely alienable).
(5) The present beneficiaries include the Church Commissioners for England ("the Commissioners"), as to a 64.109601% share, and the Secretary of State for Defence, Greenwich Hospital ("the Hospital") as to a 10.2257% share.
(6) The Commissioners are a charity. The Hospital is a Crown charity with its own governing Charter and statutes. The Hospital has its own independent identity under the Charter and statutes but beyond that does not have its own legal personality. Contracts, other legal documents and proceedings relating to Greenwich Hospital are entered into by the Secretary of State for Defence acting in his capacity as the sole trustee of the Hospital. In accordance with the Defence...
To continue reading
Request your trial
-
Project Blue Ltd
...intended apply to "scheme transactions" which modified disposals between V and P. [119]InPollen Estate Trustee Co Ltd v R & C CommrsTAX[2012] BTC 1660 the Upper Tribunal (Warren J and Judge Herrington) also referred (at [64]) to the fact that Finance Act 2003 section 75Asection 75A was an a......
-
Hyman and another v Revenue and Customs Commissioners
...... the resulting frequent disputes between taxpayers and HMRC, a “workmanlike and coherent test” was required. He ...A chargeable interest is an estate, interest, right or power in or over land: section ...As the Upper Tribunal pointed out in Pollen Estate Trustee Co Ltd v R & C Commrs [2012] BTC 1,660 at ......
-
Pollen Estate Trustee Company Ltd v Revenue and Customs Commissioners
...... Ms A Tipples QC (instructed by the General Counsel & Solicitor to HMRC) for the Respondents . . Hearing dates: 12 and 13 June 2013 . Approved Judgment ... for qualifying charitable purposes, that is— (a) for use in furtherance of the charitable purposes of the purchaser or of another charity, or (b) as an investment from which the profits are applied to the charitable purposes of the purchaser. (3) The second ......