SDLTM23250 - Reliefs: Group, reconstruction or
acquisition relief
Reconstruction and acquisition relief: Withdrawal: Non-exempt
transfer following an exempt intra-group transfer
FA03/SCH7/PARA11(1)
This subsection applies to the withdrawal of reconstruction or
acquisition relief where
- a chargeable interest has been transferred
under an exempt intra-group transfer and relief has not been
withdrawn due to FA03/SCH7/PARA10(4). See
SDLTM23240
- there is a subsequent non-exempt transfer
whereby a company holding shares in the acquiring company leaves
the same group as the target company
The effect is to withdraw relief when the chargeable interest
originally with the target company could (but does not have to)
come under control of someone outside the group as a result of a
company originally in the group (and which holds shares in the
acquiring company) leaving the group.
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- that relief has not been withdrawn because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 an exempt
intra-group transfer
- a company that holds shares in the
acquiring company (or that are derived from shares to which the
exempt intra-group transfer relates) subsequently ceases to be a
member of the same group as the target company
- before the end of a period of three years
beginning with the effective date of the relevant land transaction
(that is the date of 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
For withdrawal of the relief to have effect, at the time the
other company ceases to be a member of the same group as the target
company, the acquiring company (or a relevant associated company)
must hold a chargeable interest that
- was transferred to the acquiring company
by the relevant land transaction
- is derived from the interest that was
transferred
and
- 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
Reconstruction or acquisition relief in relation to the relevant
land transaction (or an appropriate proportion of it) is withdrawn
and stamp duty land tax becomes chargeable.
