SDLTM23030 - Reliefs: Group, reconstruction or acquisition relief
Group relief: Restrictions on availability FA03/SCH7/PARA2
Where the purchasing company (purchaser) and selling company (vendor) are in the same group, no group relief is available to the purchaser in three situations. Definitions of the terms used are at SDLTM23020.
Arrangements to transfer control of the purchaser but not the vendor para 2 (2) (1)
No relief is available where there are arrangements in existence which would mean that a person, or persons, could obtain control of the purchaser but not of the vendor.
This restriction operates where the arrangements are in existence at the effective date of the land transaction.
The arrangements must be such that a person, or persons, could obtain control of the purchaser on or after the effective date of the transaction. It does not matter whether the arrangements are actually used to transfer control.
There is an example SDLTM23030a.
Arrangements involving the consideration for the transaction para 2 (2) (a)
Group relief is not available where a non-group company, or person, is to provide or receive all or part of the consideration for the transaction, and this is done in connection with, or in pursuance of, an arrangement.
The relief is not available whether the consideration is provided or received directly or indirectly. This applies
- whether the vendor, purchaser or another group company are party to the arrangements
- when the arrangements mean that part of the consideration is provided or received as a consequence of the carrying out of a transaction (or transactions) involving a payment (or payments) or receipt (or receipts) by a person other than a group company
Arrangements involving the purchaser ceasing to be in the same group as the vendor para 2 (2) (b)
Group relief is not available where, in connection with, or in pursuance of, an arrangement or arrangements, the purchaser ceases (or could cease) to be in the same group as the vendor.
This applies where the arrangements act so that the purchaser ceases (or could cease) to be a 75% subsidiary of the vendor or third party company and so ceases (or could cease) to be in the same group as the vendor.