SDLTM23080 - Reliefs: Group, reconstruction or acquisition relief

Group relief: Withdrawal: Occasions when relief not withdrawn: FA03/SCH7/PARA4 and 4ZA

Group relief is not withdrawn where the purchaser ceases to be a member of the same group as the vendor because the vendor leaves the group.

The vendor is regarded as leaving the group if the purchaser and vendor cease to be members of the same group due to a transaction relating to shares in either:

  • the vendor
  • another company that is above the vendor in the group structure and that, as a result of the transaction, ceases to be a member of the same group as the purchaser

In relation to the first condition and to the effect if the purchaser subsequently leaves the group, please see FA03/Sch7/para4ZA and guidance at SDLTM23081.

2)  because of anything done for the purposes of, or in the course of, winding up the vendor or another company above the vendor in the group structure. A company is above the vendor in the group structure if the vendor (or another company above the vendor in the group structure) is a 75% subsidiary of the company.

3)  as a result of an acquisition of shares by another company (the acquiring company) in relation to which FA86/S75 (stamp duty acquisition relief) applies, the conditions for relief under FA86/S75 are met immediately after that acquisition, the purchaser is a member of the same group as the acquiring company.

4)  the purchaser ceases to be a member of the same group as the vendor as a result of the transfer of the whole or part of the vendor's business to another company in relation to which:

  • FA97/S96 (stamp duty relief: demutualisation of insurance companies) applies
  • the condition for relief under FA97/S96 are met
  • immediately after that acquisition, the purchaser is a member of the same group as the acquiring company

However, if relief is not withdrawn because of an acquisition of shares or transfer of the vendor’s business, withdrawal of the relief may be considered if the purchaser ceases to be a member of the same group as the acquiring company:

  • before the end of a period of three years beginning with the effective date of the relevant transaction
  • 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 transaction

For withdrawal of the relief to be considered at the time the purchaser ceases to be a member of the same group as the acquiring company, the purchaser (or a relevant associated company) must hold both:

  • the chargeable interest that was acquired under the relevant transaction, or a chargeable interest derived from the chargeable interest acquired under the relevant land transaction (for example, if a headlease was acquired under the relevant land transaction, the reversion of a sublease granted out of that headlease would be a chargeable interest derived from the original chargeable interest)
  • the chargeable interest has not subsequently been acquired at market value by means of a chargeable transaction where group relief was available but was not claimed

For the purposes of withdrawal of group relief, a relevant associated company is a company that is a member of the same group as the purchaser that ceases to be a member of the same group as the company acquiring the shares or business in consequence of the purchaser ceasing to be a member.