Chapter SDLTM23040

Published date19 March 2016
Record NumberSDLTM23040
CourtHM Revenue & Customs
IssuerHM Revenue & Customs
Restrictions on availability FA03/SCH7/PARA2(4A)

FA03/SCH7/PARA2(4A) introduced new restrictions on the availability of Stamp Duty Land Tax group relief under FA03/SCH7.

The effect is that group relief is not available where a transaction

  • is not effected for bona fide (you may also find it useful to look at Section 75A FA 2003 SDLTM09050, ) commercial reasons, or,
  • forms part of arrangements of which the main purpose, or one of the main purposes, is the avoidance of tax

‘Tax’ means income tax, capital gains tax, corporation tax, stamp duty or stamp duty land tax.

This guidance gives some examples of transactions where it is accepted that group relief is not denied by FA03/SCH7/PARA2(4A).

It should be noted that the examples are intended only to give general guidance and do not use technical or statutory language, nor should they be interpreted as if they were a statute.

They also assume that the transactions described do not form part of any larger scheme or arrangement which might have tax consequences.

Anyone who wants guidance on a specific transaction is welcome to write to us at the Stamp Office

Examples of transactions where group relief is not denied by FA03/SCH7/PARA2(4A)
  • The transfer of a property to a group company having in mind the possibility that shares in that company might be sold more than three years after the date of transfer
  • The transfer of a property to a group company having in mind the possibility that shares in that company might be sold within three years of the date of transfer, with a consequent claw-back of group relief, in order that any increase in value of the property after the intra-group transfer might be sheltered from stamp duty land tax
  • The transfer of property to a group company having in mind the possibility that either of the above might occur
  • The transfer of a property to a group company prior to the sale of shares in the transferor company, in order that the property should not pass to the purchaser of the shares
  • The transfer of property to a group company in order that commercially generated* rental income may be matched with commercially generated losses from a property income business
  • The transfer of property to a group company in order that commercially generated* chargeable gains may be matched with commercially generated allowable losses
  • The historic transfer of property to a non-resident group company in the anticipation that future appreciation or depreciation in value would be outside the...

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