SDLTM23020 - Reliefs: Group, reconstruction or acquisition relief

Definitions

Definitions used in this guidance are as follows

  • company means a body corporate and companies are members of the same group if one is the 75% subsidiary of the other or both are 75% subsidiaries of a third company. A company (company B) is the 75% subsidiary of another (company A) if company A satisfies the following conditions
    • is beneficial owner of not less than 75% of the ordinary share capital (either directly or through another company or companies as determined by sections 1155 to 1157 of the Corporation Tax Act 2010 of company B
    • is beneficially entitled to not less than 75% of the profits available for distribution to equity holders of company B
    • would be beneficially entitled to not less than 75% of any assets of company B available for distribution to its equity holders on a winding-up
  • ordinary share capital, for the purpose of these definitions, means all the issued share capital of the company, by whatever name called, apart from that share capital which only confers rights to a fixed dividend with no other rights to participate in the profits of the company.

The detailed rules on these qualifying tests are at Chapter 6 of Part 5 of the Corporation Tax Act 2010 (equity holders and profits or assets available for distribution) and, for the purposes of stamp duty land tax this chapter applies with the exceptions of section 171 (1) (b) and (3), 173, 174 and 176 to 178 of that Act.

  • arrangements includes any scheme, agreement or understanding, whether or not legally enforceable
  • control has the meaning given by section 1124 of the Corporation Tax Act 2010. This means the power of a person to secure that the affairs of the company are conducted in accordance with their wishes:
    • by holding shares in the company or having voting power in or in relation to the company
    • by virtue of powers conferred by the articles of association of the company or by virtue of any other document regulating the company
  • group company means a company that at the effective date of the land transaction is a member of the same group as the purchaser or vendor.
  • non-group company is a company that is not a group company