Providence House sale raises questions over £18.5m stamp duty avoidance

The sale of Providence House in Chelsea, reported to be the most expensive house ever sold in Britain for approximately £265 million, has raised questions regarding stamp duty avoidance. The property was sold by developer Nick Candy to hedge fund manager Suneil Setiya.

Analysis by Tax Policy Associates and London Centric suggests that a loophole in the Finance Act 2003 allowed the transaction to avoid roughly £18.5 million in stamp duty. While a purchase of this magnitude would typically incur a £32 million tax bill, the structure used resulted in a payment of approximately £13 million.

The transaction involved Providence House LLP, an entity incorporated by Candy, his wife Holly Valance, and two advisers. By including five other flats in the transaction, the sale was reportedly treated as a commercial rather than a residential transaction, applying a 5% rate instead of the 12% residential rate. Experts have questioned whether HMRC will attempt to recover the unpaid tax.