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HMRC internal manual

Stamp Duty Land Tax Manual

HM Revenue & Customs
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Reliefs: Group Tax Bulletin article: Paragraph 2(2)(b): arrangements for the purchaser to cease to be a member of the same group

A claim for relief is not appropriate if there are arrangements for the purchaser to ceaseto be a 75% subsidiary of the vendor or a third company. In deciding whether there are anysuch arrangements, the practical likelihood of the scheme being carried through is not initself relevant.

But HM Revenue & Customs (HMRC) will not take the view that just because land istransferred to a group company which does nothing other than hold property it follows thatthere are arrangements for the purchaser to leave the group. We recognise that there aremany commercial reasons why groups may transfer property internally. It is necessary toconsider the full circumstances of the case to decide whether such arrangements are inplace.

Whether such arrangements were or were not in place must be decided at the time of thereturn and HMRC enquiries will seek to establish the facts at the effective date of thetransaction.