SDLTM23090A - Reliefs: Group, reconstruction or acquisition relief

Group relief: Withdrawal: Examples

Purchaser ceases to be a member of the same group as the vendor within 3 years

B Ltd is 100% owned by A Ltd. These two companies form a group for the purposes of Stamp Duty Land Tax.

A Ltd (the vendor) transfers the freehold interest in a parcel of land to B Ltd (the purchaser) for no consideration. This is the relevant transaction. Company B claims group relief in respect of the transfer.

A Ltd sells the shares in B Ltd to an unconnected third party within three years intra-group transfer. The market value of the freehold interest is £1,750,000 on 07/07/06. As a result of this sale of shares B Ltd leaves the group.

As the purchaser (B Ltd) left the same group as the vendor (A Ltd) before the end of the period of three years from the date of the relevant transaction group relief is withdrawn as no exceptions apply.

B Ltd still holds the freehold interest which was the subject of the relevant transaction (the transfer of the interest from A to B).

The Stamp Duty Land Tax payable is that which would have been payable on the original land transaction, i.e. on the market value at the effective date of the original land transaction.

No account is taken of the increase in value of the freehold interest as it is the relief claimed at the time of the relevant transaction that is withdrawn.