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HMRC internal manual

Stamp Duty Land Tax Manual

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HM Revenue & Customs
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Reliefs: Group, Arrangements

Group relief in relation to transactions carried out in preparation for an acquisitionto which section 75 Finance Act 1986 (acquisition relief) applies.

Concern has been expressed that because the transactions are carried out in preparation for the acquisition there may be ‘arrangements’ which deny the availability of group relief under FA03/SCH7/PARA2

There are two relevant types of arrangements:

In many acquisitions to which FA1986/S75 will apply both a change of control and a de-grouping will occur.

Paragraph 2(1) ends with a proviso to the effect that arrangements entered into with aview to an acquisition to which FA1986/S75 applies are not ‘control’arrangements denying group relief. Paragraph 2(2)(b) does not include a similar proviso.Paragraph 2 must be read as a whole and the proviso must apply also to paragraph 2(2)(b),otherwise it would in practice be of no effect. It is accepted that arrangements entered into with a view to an acquisition to which FA1986/S75 applies are not‘de-grouping’ arrangements denying group relief.

 

  • Arrangements whereby someone could obtain control of the transferee but not of the transferor (‘control’ arrangements) (paragraph 2(1) of schedule 7)
  • Arrangements whereby transferor and transferee will cease to be members of the same group by reason of the transferee ceasing to be a 75% subsidiary of the transferor or of a third company’ (‘de-grouping’ arrangements) (paragraph 2(2)(b) of Schedule 7)