Christian Peter Candy v The Commissioners for HMRC

The Court of Appeal considered whether section 44(9) Finance Act 2003 displaced the general 12 month time limit for amending a land transaction return in Schedule 10, paragraph 6(3) FA 2003 so that a repayment claim under section 44(9) could be made at any time after a contract was subsequently not carried into effect. The court held that section 44(9) gives a substantive right to repayment but expressly requires that repayment be claimed by amendment of the original return and therefore is subject to the general time limit in Schedule 10, paragraph 6(3). The ordinary meaning and grammar of the word "afterwards" in section 44(9) did not disapply the procedural time limit, and Parliament’s choice not to provide an express alternative timetable supported that construction.

This is an appeal from the Upper Tribunal ([2021] UKUT 170 (TCC)) concerning a claim for repayment of stamp duty land tax (SDLT) made by amendment to a land transaction return originally filed on 8 October 2012. The appellant paid SDLT after "substantial performance" of a contract under section 44 FA 2003. The contract was later novated and the original purchaser was released; the appellant sought repayment under section 44(9) FA 2003 by amending his 2012 return in April 2014.

The procedural history is: the First-tier Tribunal allowed the repayment claim on the basis that the words "except as otherwise provided" in Schedule 10, paragraph 6(3) FA 2003, read with the word "afterwards" in section 44(9), meant the 12 month amendment time limit did not apply; the Upper Tribunal reversed that decision and held the amendment was out of time; the present appeal was brought with permission of the Upper Tribunal.

The principal issues were (i) whether the word "afterwards" in section 44(9) operates to disapply the general 12 month time limit for amending a return in Schedule 10, paragraph 6(3), and (ii) more broadly whether Parliament intended the procedural time limits of the self-assessment regime to yield in favour of an unlimited or extended entitlement to reclaim SDLT where a contract is later not carried into effect.

The Court of Appeal analysed the statutory scheme for SDLT, the purpose of section 44 (to prevent "resting on contract" avoidance while recognising possible unfairness where contracts are not carried into effect) and the self-assessment framework in Schedule 10. The court concluded that section 44(9) creates a substantive repayment right but prescribes the means of claiming it by amendment of the original return; procedural time limits in Schedule 10, paragraph 6(3) therefore apply. The single word "afterwards" was read as indicating temporal sequence only and not as a means to override the clear, hard-edged amendment deadline. The court endorsed the Upper Tribunal’s approach that certainty and finality in the self-assessment system, and Parliament’s express choices elsewhere, supported treating the repayment claim as time-limited.

This appellate court dismissed the appeal. The court held that section 44(9) FA 2003, while creating a substantive right to repayment where a contract is rescinded, annulled or otherwise not carried into effect, requires that repayment be claimed by amendment of the original land transaction return; accordingly the general 12 month time limit for amendment in Schedule 10, paragraph 6(3) FA 2003 applies and an amendment made after that period is out of time. The word "afterwards" in section 44(9) does not disapply the procedural time limit.

Appeal from the Upper Tribunal (Tax and Chancery Chamber) [2021] UKUT 170 (TCC), following a First-tier Tribunal decision (FTT decision dated 26 February 2020) that had allowed the taxpayer's repayment claim. The Upper Tribunal reversed the FTT and this Court of Appeal dismissed the taxpayer's appeal.