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HMRC internal manual

Stamp Duty Land Tax Manual

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HM Revenue & Customs
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Reliefs and Exemptions: Sale and leaseback arrangements: Example

Example 3

Company A owns a leasehold interest in a commercial property, to raise finance it decides to assign its lease to company B; both A & B are 100% subsidiaries of C, in consideration of £1m and a leaseback at market rent of the ground floor only.

Section 57A does not apply as the companies are in the same group at the time of the transaction, so both the assignment and the leaseback are chargeable on their market value. Group relief may be available for both elements of the transaction if the conditions of paragraphs 1 & 2 Schedule 7 Finance Act 2003 are met, but the withdrawal provisions of paragraph 3 must also be considered.