Caleb Brandon Halstead v The Commissioners for HMRC

An overpayment-relief exclusion in paragraph 34A of Schedule 10 to the Finance Act 2003 remains available after HMRC opens an enquiry into the claim. A closure notice may treat a claim as excessive because HMRC is not liable to give effect to it under that exclusion. If no exclusion applies, HMRC must then address the claim’s substantive merits.

Section 74A of the Finance Act 1960 does not exempt a visiting force member’s private home from SDLT. Read as a whole, it concerns transactions for the collective purposes of a visiting force. Further, relief must be claimed in a land transaction return or a valid amendment. That is a mandatory condition of entitlement, not merely a procedural formality.

The applicant sought permission to appeal against a First-tier Tribunal decision released on 27 September 2023. The First-tier Tribunal had struck out his SDLT appeal concerning a property acquired in 2018.

He had sought repayment on the basis of the visiting-forces exemption in section 74A of the Finance Act 1960. HMRC opened an enquiry into his overpayment-relief claim and issued a closure notice, relying on Case A in paragraph 34A(2) of Schedule 10 to the Finance Act 2003. The First-tier Tribunal held both that the claim was procedurally barred and that the exemption did not extend to an individual member’s private residence.

The renewed application raised whether opening an enquiry prevented HMRC from relying on paragraph 34A, whether section 74A covered the purchase, and whether the 2012 designation order required consideration.

1. Permission to appeal was refused on all four grounds. The grounds disclosed no material arguable error of law and had no realistic prospect of success.

2. Paragraph 34A of Schedule 10 to the Finance Act 2003 is a specific and broad exclusion from overpayment relief. It is not displaced when HMRC opens an enquiry under Schedule 11A. A claim may properly be treated in a closure notice as excessive where an exclusion applies. The contrary construction would defeat the statutory exclusions and could deny a taxpayer an appeal against HMRC’s reliance on them. If an exclusion does not apply, HMRC should determine the substantive merits of the claim.

3. Section 74A(2) of the Finance Act 1960, construed in its statutory and historical context, concerns land transactions serving the collective purposes of a visiting force. Its references to barracks, camps, training, and the health or efficiency of a force do not encompass buying private accommodation for one member. The First-tier Tribunal had therefore committed no arguable error in holding that the applicant’s purchase did not qualify.

4. In any event, section 74A(3) makes a claim in a land transaction return or a valid amendment a mandatory condition for the relief. The applicant had not met that condition. It could not be circumvented through a later overpayment-relief claim.

5. The alleged failure to consider the 2012 Order was neither established nor material. Its Explanatory Note did not support the proposed SDLT construction.

• Upper Tribunal (Tax and Chancery Chamber): Permission to appeal from the First-tier Tribunal was refused on reconsideration following an oral hearing: [2025] UKUT 22 (TCC).
• First-tier Tribunal (Tax Chamber): On 27 September 2023, HMRC’s application to strike out the applicant’s SDLT appeal was granted. Permission to appeal was refused by the First-tier Tribunal on 26 June 2024.