Christian Peter Candy v The Commissioners for HMRC

In a self-assessed SDLT scheme, a substantive right to repayment does not itself displace a procedural time limit. Where tax is charged on substantial performance under section 44(4) of the Finance Act 2003 and the contract is later rescinded, annulled or not carried into effect, section 44(9) creates the repayment right but requires the claim to be made by amendment of the return. The 12-month limit in Schedule 10, paragraph 6(3) therefore applies. The word afterwards marks the sequence of events and does not create an exception. Hard-edged deadlines may cause hardship, but they promote certainty, finality and sound administration while balancing avoidance risks against relief for innocent transactions.

The taxpayer paid SDLT after a contracted-out lease was substantially performed. The contract was later novated in favour of his brother, and the taxpayer sought repayment by amending his land transaction return after the ordinary period for amendment had expired.

The First-tier Tribunal held that section 44(9) of the Finance Act 2003 permitted a repayment claim at any time. The Upper Tribunal reversed that decision, holding that the claim was subject to Schedule 10, paragraph 6(3), and was out of time: [2021] UKUT 170 (TCC). The central issue was whether section 44(9) made alternative provision displacing the general time limit.

The Court of Appeal unanimously dismissed the appeal. Simler LJ gave the judgment; Arnold LJ and Nugee LJ agreed.

1. Statutory context. The statutory task was to ascertain Parliament’s meaning and purpose by reading the disputed provisions in the context of the legislation as a whole and its historical setting. The court adopted the approach explained in R (Quintavalle) v Secretary of State for Health [2003] UKHL 13.
2. Function of section 44. Section 44 of the Finance Act 2003 was directed in part against the avoidance technique of resting on contract. Section 44(4) made substantial performance the relevant SDLT event even without formal completion. Subsections (8) and (9) recognised that this could produce unfairness where the contract was later completed or was not carried into effect.
3. Construction of section 44(9). The first sentence of section 44(9) conferred the substantive right to repayment. The second sentence prescribed the procedure by requiring the repayment to be claimed by amendment of the land transaction return. The amendment therefore remained subject to the generally applicable limit in Schedule 10, paragraph 6(3).
4. Meaning of “afterwards”. The word indicated only the sequence between substantial performance and rescission or annulment. Its grammatical position did not support an unexpressed exception to the time limit, particularly because it did not naturally govern the separate limb concerning a contract not carried into effect for any other reason.
5. Purpose and consequences. Hard-edged deadlines are an essential feature of self-assessment. Parliament could rationally balance relief for innocent transactions against avoidance prevention, certainty and finality by allowing amendment for 12 months after the filing date. The possibility of hardship or abuse did not justify departing from the statutory language. The taxpayer’s amendment was therefore out of time.

1. Court of Appeal (Civil Division) dismissed the taxpayer’s appeal and upheld the Upper Tribunal’s construction of the statutory time limit.
2. Upper Tribunal (Mr Justice Mellor and Judge Andrew Scott), [2021] UKUT 170 (TCC), reversed the First-tier Tribunal and held that the repayment claim was out of time.
3. First-tier Tribunal held that a claim under section 44(9) of the Finance Act 2003 could be made at any time and was not subject to the ordinary 12-month amendment period.