Stamp duty ― corporate transactions

By Tolley in association with Grant Thornton's stamp taxes team
Stamp duty ― corporate transactions

The following Corporation Tax guidance note by Tolley in association with Grant Thornton's stamp taxes team provides comprehensive and up to date tax information covering:

  • Stamp duty ― corporate transactions
  • Application of basic rules and introduction to corporate reliefs
  • Relief for transfers between associated companies (group relief)
  • Relief for insertion of new holding company (HoldCo)
  • Reconstruction relief

Application of basic rules and introduction to corporate reliefs

The basic rules for stamp duty apply to companies as they do to other taxpayers. See the Stamp duty ― basic rules guidance note for an introduction to the stamp duty regime.

However, stamp duty legislation also includes important reliefs which apply in relation to particular corporate transactions.

The most commonly encountered reliefs are:

  • associated company relief (known as group relief) (FA 1930, s 42)
  • relief for insertion of a new holding company (FA 1986, s 77)
  • reconstruction relief (FA 1986, s 75)

These are explained in further detail below.

There are also reliefs applicable for transfers to recognised intermediaries, repurchases and stock lending, and transfers to charities.

In contrast to transactions which are exempt from stamp duty, even where reliefs eliminate the stamp duty liability in full, the transfer document will still need to be sent to HMRC for adjudication and stamping. See the Stamp duty ― basic rules guidance note for further details.

Reliefs should be applied for in writing to HMRC Stamp Taxes Birmingham office with sufficient and appropriate evidence to support the claim. HMRC will scrutinise applications carefully and thorough checks should be made before sending the application that all required documentation is enclosed and any confirmations and certifications are made by the appropriate individual(s). Further details of the reliefs are provided below.

Relief for transfers between associated companies (group relief)

Group relief is available where the instrument concerned transfers the beneficial interest in property (now in practice almost entirely limited to stock or marketable securities) from one body corporate to another and those bodies are associated at the time the instrument is executed.

FA 1930, s 42

Association is through one

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