Tax specialists are questioning the stamp duty paid on the £265 million sale of Providence House in Chelsea, which was Britain's most expensive residential property transaction. Analysis by London Centric and Tax Policy Associates suggests the transaction structure may have reduced the stamp duty liability by approximately £18.5 million.
Property developer Nick Candy sold Providence House to hedge fund manager Suneil Setiya in May. According to Dan Neidle, founder of Tax Policy Associates, a standard £265 million house purchase would typically incur £32 million in stamp duty, but research indicates approximately £13 million was paid on this transaction.
The property was sold through Providence House LLP, incorporated by Candy, his wife Holly Valance, and two advisers. This structure, which included five additional flats transferred into the LLP, allowed the transaction to be classified as commercial, applying a 5% rate instead of the 12% residential rate, based on the Finance Act 2003.
Neidle stated that if HMRC cannot recover the amount, the scheme may be adopted by other buyers of high-value properties until authorities close the loophole. The parties involved believe the correct amount of stamp duty was paid.