SDLTM23017 - Reliefs: Group Tax Bulletin article: Paragraph 2(2)(b): arrangements for the purchaser to cease to be a member of the same group

A claim for relief is not appropriate if there are arrangements for the purchaser to cease to be a 75% subsidiary of the vendor or a third company. In deciding whether there are any such arrangements, the practical likelihood of the scheme being carried through is not in itself relevant.

But HM Revenue & Customs (HMRC) will not take the view that just because land is transferred to a group company which does nothing other than hold property it follows that there are arrangements for the purchaser to leave the group. We recognise that there are many commercial reasons why groups may transfer property internally. It is necessary to consider the full circumstances of the case to decide whether such arrangements are in place.

Whether such arrangements were or were not in place must be decided at the time of the return and HMRC enquiries will seek to establish the facts at the effective date of the transaction.