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HMRC internal manual

Stamp Duty Land Tax Manual

HM Revenue & Customs
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Reliefs: Group, reconstruction or acquisition relief

Vendor leaves the group

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

D Ltd (the vendor) transfers the freehold interest in a parcel of land to C Ltd (the purchaser) for no consideration on 25/06/04. This is the relevant transaction. The market value of the freehold interest is £1,000,000 on 25/06/04. C Ltd claims group relief in respect of the transfer.

A Ltd then sells the shares in B Ltd to an unconnected third party on 07/07/06. The market value of the freehold interest is £1,750,000 on 07/07/06. As a result of the sale of shares, B Ltd leaves the group on 07/07/06 (and D Ltd goes with it as it is a 100% subsidiary of B Ltd).

Group relief is not withdrawn. This is because the only reason the purchaser (C Ltd) has ceased to be a member of the same group as the vendor (D Ltd) is because the vendor has left the group as a result of a transaction in another company (B Ltd).

This would also apply if instead of A Ltd selling all the shares in B Ltd, it only sold enough shares so that it no longer owned 75% of them and thus B Ltd (and D Ltd) were no longer grouped.