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Stamp Duty Reorganisation Relief

Could you please point me in the right direction on stamp duty reorganisation relief.

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    admin

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    Hi

    If you are considering transferring group company shares, the you need to be aware of SDLT reorganisation relief. FA 1986, s 77 provides the conditions where stamp duty is not payable on a transfer form transferring shares in the target to the acquiring company and these are as follows:

    • The transfer forms part of an arrangement by which the acquiring company acquires the whole of the issued share capital of the target.
    • The acquisition is effected for bona fide commercial reasons and must not be part of a scheme or arrangement a main purpose of which is the avoidance of certain taxes — this is taken to be satisfied if advance clearance for the scheme has been obtained under section 138 or 139 of the Taxation of Chargeable Gains Act 1992 or section 707 of the Income and Corporation Taxes Act 1988.
    • The consideration for the acquisition consists only of the issue of shares in the acquiring company.
    • The shareholders of the acquiring company after the acquisition must be the same as those of the target immediately before the acquisition.
    • The classes of share and the proportions of shares of any class of the acquiring company after the acquisition must be the same as those of the target immediately before the acquisition.
    • The proportion of shares of any particular class held by any particular shareholder of the acquiring company after the acquisition must be the same as the proportion of shares of that class held by him in the target immediately before the acquisition.

    Note that it is compulsory to apply for this relief and obtain an adjudication stamp on the transfers

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