4(1)Group relief is not withdrawn under paragraph 3 in the following cases.U.K.
F1(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F2(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(4)The second case is where the purchaser ceases to be a member of the same group as the vendor by reason of anything done for the purposes of, or in the course of, winding up the vendor or another company that is above the vendor in the group structure.
(5)For [F3the purposes of [F4sub-paragraph (4)]] a company is “above” the vendor in the group structure if the vendor, or another company that is above the vendor in the group structure, is a 75% subsidiary of the company.
(6)The third case is where—
(a)the purchaser ceases to be a member of the same group as the vendor as a result of an acquisition of shares by another company (“the acquiring company”) in relation to which—
(i)section 75 of the Finance Act 1986 (c. 41) applies (stamp duty: acquisition relief), and
(ii)the conditions for relief under that section are met,
and
(b)the purchaser is immediately after that acquisition a member of the same group as the acquiring company.
[F5(6A)The fourth case is where—
(a)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 (“the acquiring company”) in relation to which—
(i)section 96 of the Finance Act 1997 applies (stamp duty relief: demutualisation of insurance companies), and
(ii)the conditions for relief under that section are met, and
(b)the purchaser is immediately after that transfer a member of the same group as the acquiring company.]
(7)But if in a case within sub-paragraph (6) [F6or (6A)] —
(a)the purchaser ceases to be a member of the same group as the acquiring company—
(i)before the end of the period of three years beginning with the effective date of the relevant transaction, or
(ii)in pursuance of, or in connection with, arrangements made before the end of that period,
and
(b)at the time the purchaser ceases to be a member of the same group as the acquiring company, it or a relevant associated company holds a chargeable interest—
(i)that was acquired by the purchaser under the relevant transaction, or
(ii)that is derived from an interest so acquired,
and that has not subsequently been acquired at market value under a chargeable transaction for which group relief was available but was not claimed,
the provisions of this Part relating to group relief apply as if the purchaser had then ceased to be a member of the same group as the vendor.
(8)In sub-paragraph (7)—
“arrangements” includes any scheme, agreement or understanding, whether or not legally enforceable; and
“relevant associated company”, in relation to the purchaser, means 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 acquiring company in consequence of the purchaser so ceasing.
Textual Amendments
F1Sch. 7 para. 4(2) omitted (with effect in accordance with s. 96(6) of the amending Act) by virtue of Finance Act 2008 (c. 9), s. 96(3)(a)
F2Sch. 7 para. 4(3) omitted (with effect in accordance with s. 96(6) of the amending Act) by virtue of Finance Act 2008 (c. 9), s. 96(3)(a)
F3Words in Sch. 7 para. 4(5) substituted (with effect in accordance with Sch. 10 para. 16(1)(6)-(9) of the amending Act) by Finance (No. 2) Act 2005 (c. 22), Sch. 10 para. 5(b)
F4Words in Sch. 7 para. 4(5) substituted (with effect in accordance with s. 96(6) of the amending Act) by Finance Act 2008 (c. 9), s. 96(3)(b)
F5Sch. 7 para. 4(6A) inserted (with effect in accordance with s. 167(5) of the amending Act) by Finance Act 2006 (c. 25), s. 167(4)(a)
F6Words in Sch. 7 para. 4(7) inserted (with effect in accordance with s. 167(5) of the amending Act) by Finance Act 2006 (c. 25), s. 167(4)(b)