2(1)Group relief is not available if at the effective date of the transaction there are arrangements in existence by virtue of which, at that or some later time, a person has or could obtain, or any persons together have or could obtain, control of the purchaser but not of the vendor.U.K.
This does not apply to arrangements entered into with a view to an acquisition of shares by a company (“the acquiring company”)—
(a)in relation to which section 75 of the Finance Act 1986 (c. 41) (stamp duty: acquisition relief) will apply,
(b)in relation to which the conditions for relief under that section will be met, and
(c)as a result of which the purchaser will be a member of the same group as the acquiring company.
[F1For other exceptions to this, see sub-paragraph (3A) and paragraphs 2A and 2B.]
(2)Group relief is not available if the transaction is effected in pursuance of, or in connection with, arrangements under which—
(a)the consideration, or any part of the consideration, for the transaction is to be provided or received (directly or indirectly) by a person other than a group company, or
(b)the vendor and the purchaser are to cease to be members of the same group by reason of the purchaser ceasing to be a 75% subsidiary of the vendor or a third company.
(3)Arrangements are within sub-paragraph (2)(a) if under them the vendor or the purchaser, or another group company, is to be enabled to provide any of the consideration, or is to part with any of it, by or in consequence of the carrying out of a transaction or transactions involving, or any of them involving, a payment or other disposition by a person other than a group company.
[F2(3A)Sub-paragraphs (1) and (2)(b) do not apply to arrangements in so far as they are for the purpose of facilitating a transfer of the whole or part of the business of a company to another company in relation to which—
(a)section 96 of the Finance Act 1997 is intended to apply (stamp duty relief: demutualisation of insurance companies), and
(b)the conditions for relief under that section are intended to be met.]
(4)In sub-paragraphs (2)(a) and (3) a “group company” means a company that at the effective date of the transaction is a member of the same group as the vendor or the purchaser.
[F3(4A)Group relief is not available if the transaction—
(a)is not effected for bona fide commercial reasons, or
(b)forms part of arrangements of which the main purpose, or one of the main purposes, is the avoidance of liability to tax.
“Tax” here means stamp duty, income tax, corporation tax, capital gains tax or tax under this Part.]
(5)In this paragraph—
“arrangements” includes any scheme, agreement or understanding, whether or not legally enforceable; and
“control” has the meaning given by [F4section 1124 of the Corporation Tax Act 2010].
Textual Amendments
F1Words in Sch. 7 para. 2(1) substituted (1.3.2013) by The Enactment of Extra-Statutory Concessions Order 2013 (S.I. 2013/234), arts. 1, 8 (with art. 9)
F2Sch. 7 para. 2(3A) inserted (with effect in accordance with s. 167(5) of the amending Act) by Finance Act 2006 (c. 25), s. 167(3)
F3Sch. 7 para. 2(4A) inserted (with effect in accordance with Sch. 10 para. 22(1)-(3)(5) of the amending Act) by Finance (No. 2) Act 2005 (c. 22), Sch. 10 para. 19
F4Words in Sch. 7 para. 2(5) substituted (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), s. 1184(1), Sch. 1 para. 416(3) (with Sch. 2)
Modifications etc. (not altering text)
C1Sch. 7 para. 2 modified (25.2.2011) by Horserace Betting and Olympic Lottery Act 2004 (c. 25), ss. 4(3)(c), 40; S.I. 2011/462, art. 2