SDLTM23260 - Reliefs: Group, reconstruction or
acquisition relief
Reconstruction and acquisition relief: Withdrawal: Non-exempt
transfer following a transaction 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acquisition relief and consequently relief has not been withdrawn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 shares in the company that acquired the land
changes after relief has been claimed. A further land 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- that relief has not been withdrawn because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
- 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
and
- 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.
For withdrawal of the relief to have effect, at the time control
of the other company changes, 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
transaction (or an appropriate proportion of it) is withdrawn and
stamp duty land tax becomes chargeable.
