IFM41140 - Stamp duty and SDRT: disqualifying arrangements

A repurchase of own shares or loan capital is a disqualifying arrangement where it is reasonable to assume that:

• the repurchase of own shares from an existing holder is connected with the issuing of new shares or loan capital to an acquirer (a person other than the existing holder); and
• the main purpose or one of the main purposes of the repurchase and new issuing is to secure an outcome which is substantially economically equivalent to a transfer of the QAHC’s own shares or loan capital from the existing holder to the acquirer.

This ensures that Stamp Duty or SDRT should be paid where transactions which are substantially economically equivalent to transfers of shares or loan capital are effected by way of a subscription for new securities (which would be exempt from Stamp Duty and SDRT) and an associated repurchase.