Application of exemptions and reliefs: Group Relief
There is a transfer of a chargeable interest from EP/ELP to B Ltd.
We are looking at a transfer from a partnership so the provisions of para 2 will apply we therefore need to establish any SDLT liability using para18 and 20 - see SDLTM33750
Identify the relevant owner or owners.
B Ltd is a relevant owner because, immediately after the transaction, it is entitled to a proportion of the chargeable interest and immediately before the transaction it was a partner.
For each relevant owner, identify the corresponding partner or partners.
B Ltd is its own corresponding partner because, immediately before the transaction it was a partner and it was the relevant owner.
(C Ltd can not be a corresponding partner as it is not an individual)
B Ltd is entitled to 100% of the chargeable interest immediately after the transaction.
As there is only one corresponding partner, this proportion is all apportioned to B Ltd.
The lower proportion for each person who is a corresponding partner (here B Ltd) is the proportion of the chargeable interest attributable to the partner, or if lower, the partnership share attributable to the partner.
In this case the figures are 100% (the proportion of the chargeable interest attributable to the partner) and 50% (the partnership share attributable to the partner) respectively, so the lower proportion is 50.
We just have one lower proportion, so there is nothing to add together. As a result, the sum of the lower proportions in this instance is 50.
Chargeable consideration is MV x (100-SLP)%
MV x 50% = 50%
Therefore we have a 50% of market value charge.
Utilising Para 2(1) we would look through the partnership to the partners and this is effectively a transfer from B Ltd and C Ltd to B Ltd, i.e. C Ltd transfers its 50% interest in the property to B Ltd.
As B Ltd and C Ltd are both 100% subsidiaries of A Ltd Sch 7 will apply (providing the requirements of Sch7/para2 are met) which will give relief against the charge identified under Sch15.