An appeal against a 50% penalty for failure to take corrective action in response to a follower notice was allowed, as it was reasonable in all the circumstances not to have taken corrective action. 

The appellant company was involved in an avoidance arrangement involving the purchase of a property (a ‘sub-sale distribution in specie’ scheme) in August 2011. No stamp duty land tax (SDLT) was paid on the property purchase.

HM Revenue and Customs (HMRC) opened an enquiry into the land transaction return for the property. Subsequently, other cases were heard by the First-tier Tribunal (FTT) about similar schemes to that used to purchase the property. The scheme was found not to work. HMRC treated a decision released in February 2017 as the final judicial ruling relevant to the chosen arrangements.

In September 2017, HMRC sent the