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HMRC internal manual

Stamp Taxes on Shares Manual

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HM Revenue & Customs
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Exemptions and reliefs: reliefs: company reconstructions and acquisitions - Section 75 - issue of shares and 'shareholder'

Issue of Shares

For the purposes of FA86/S75 and S77, the ‘issue’ of shares means something more than mere allotment and requires some subsequent act whereby title is completed. It indicates the whole process where new shares are applied for, allotted and registered (National Westminster Bank plc v IRC [1994] STC 580). It follows that shares are issued when they are properly recorded in the Register of Members.

The customer must show that, apart from the assumption or discharge of the target company’s liabilities, the consideration consists solely of the issue of non-redeemable shares in the acquiring company to all of the shareholders of the target company. The omission of even one shareholder of the target company, for example if the holders of the subscriber shares have been overlooked, bars relief. The strict application of this rule often leads to concern on the part of our customers but the relief has now been in place for well over a decade and we will help customers as far as possible to avoid unintentional errors of this type if they seek our opinion in advance.

Shareholder

The term ‘shareholder’ means the registered or legal owner of the shares (Oswald Tillotson v CIR [1933] 1 KB 134; Murex v IRC [1933] 1 KB 173).