The purchaser, David Hannah, runs a tax advice firm called Cornerstone Tax. He bought the property in 2011 with a deposit of £38,250, with the rest to be paid through an annuity.
Under the original terms of the annuity, the sellers would be paid £383 a year, meaning it would take the best part of 2,000 years in order to pay off the full balance, according to the tribunal documents.
However, responsibility for paying the annuity was then transferred to a firm in the British Virgin Islands, which paid the full amount when it was called in by the vendor’s own lawyers.
Hannah claimed the structure of the deal meant it fell within the zero per cent stamp duty threshold, but the taxman disgreed, leading to demands for the £30,600 in unpaid stamp duty, plus interest, as well as individual penalties against Hannah and his wife.
The courts have found against his appeal however.
Knowingly provided erroneous document
Victoria Nicholl, tribunal judge, stated that he “knowingly provided” HMRC with a document that contained an error “with the intention that HMRC should rely upon it as an accurate document”.
She continued: “The failure to notify the full chargeable consideration of £765,000 was an inaccuracy that led to an understatement of tax and it was deliberate on Mr Hannah’s part.”
However, the tribunal has dropped the fine against his wife.
Hannah is described as the “leading voice on SDLT” on his firm’s website, having spent three decades working in property tax.
Mortgage Solutions has contacted Hannah for comment.
