Beta This part of GOV.UK is being rebuilt – find out what this means

HMRC internal manual

Stamp Duty Land Tax Manual

From
HM Revenue & Customs
Updated
, see all updates

Reliefs: Group, reconstruction or acquisition relief

Reconstruction and acquisition relief: Withdrawal: Non-exempt transfer following atransaction to which shares acquisition relief applies FA03/SCH7/PARA11(2)

This section applies to the withdrawal of reconstruction or acquisition relief where

  • a chargeable interest has been transferred by means of a transaction that was exempt as a result of share acquisition relief and consequently relief has not been withdrawn due to FA03/SCH7/PARA10(5). See SDLTM23240
  • there is a subsequent non-exempt transfer which changes control of the company which obtained shares in the acquiring company

The effect of this is to withdraw relief when control of a company which holds sharesin the company that acquired the land changes after relief has been claimed. A furtherland transaction return and payment should be made. See SDLTM50400.

Withdrawal of reconstruction or acquisition relief occurs where

  • reconstruction or acquisition relief has been claimed by the acquiring company on a relevant transaction
  • that relief has not been withdrawn because control of the acquiring company changed as a result of a transaction that was exempt becauseof share acquisition relief
  • control of the company which obtained shares in the acquiring company as a result of that transaction (or that are derived from those shares) subsequently changes

and

For withdrawal of the relief to have effect, at the time control of the other companychanges, the acquiring company (or a relevant associated company) must hold a chargeableinterest that

and

Reconstruction or acquisition relief in relation to the relevant transaction (or anappropriate proportion of it) is withdrawn and stamp duty land tax becomes chargeable.
 

    • before the end of a period of three years beginning with the effective date of the relevant land transaction (that is the transaction which originally transferred the chargeable interest)
    • in pursuance of or in connection with arrangements made before the end of a period of three years beginning with the effective date of the relevant land transaction
 

  * the company still holds the shares (or shares derived from those shares) transferred as a result of the transaction to which share acquisition relief applied.

 

  * was transferred to the acquiring company by the relevant land transaction
  * is derived from the interest that was transferred

 

  * the chargeable interest has not subsequently been acquired at market value by means of a chargeable land transaction where reconstruction or acquisition relief was available but was not claimed