Stamp duty land tax ― corporate transactions

Produced by Tolley in association with Grant Thornton's stamp taxes team

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

  • Stamp duty land tax ― corporate transactions
  • Application of basic rules
  • Connected companies
  • Group relief
  • Other reliefs from SDLT on corporate transactions
  • Reconstruction relief
  • Acquisition relief
  • Withdrawal of relief

Application of basic rules

Where a company acquires the subject matter of a land transaction, it will generally be subject to stamp duty land tax (SDLT) in the same way as other purchasers under FA 2003, s 43, with chargeable consideration being determined by normal SDLT principles including those set out in FA 2003, Sch 4. See the Stamp duty land tax ― basic rules guidance note for further details on the charge to SDLT.

Connected companies

Where the company is connected with the person from whom it acquires its interest in land (whether the vendor is an individual or a company), the consideration is deemed to be no less than the market value of the subject matter.

The definition of a connected person for this purpose is provided by CTA 2010, s 1122.

The rule also has effect where a vendor transfers property to a company and some or all of the consideration for that transfer consists of the issue or transfer of shares in a company with which the vendor is connected.

See Example 1.

Certain exclusions from the deemed market value rule are provided by FA 2003, s 54 and other reliefs and exemptions may apply depending on the specific circumstances. In particular, where the transaction is, or is part of, a distribution of assets of the vendor (whether on liquidation or otherwise such as a dividend in specie) the deemed market value rule may not apply. Care is required here as this exclusion does not apply where the subject matter of the transaction had been the subject of a group relief claim within the previous three years.

Group relief

Group relief is available under FA 2003, Sch 7, para 1 where the vendor (V) and the purchaser (P) are both companies that are members of the same group. A transaction is exempt from charge to SDLT provided certain conditions are satisfied. For these purposes, a 75% parent / subsidiary relationship is required, or both companies must be

There’s no margin for error.
Think Tax.
Think Tolley.
TolleyGuidance gives you direct access to critical, comprehensive and up-to-date tax information and expertise you can rely on.
Take a free trial
Popular documents
LEXISNEXIS

Legal and professional fees

Statutory references to ITTOIA 2005 relate to unincorporated businesses and CTA 2009 relate to companies unless otherwise stated.Legal and other professional fees can represent substantial costs to a business. A detailed analysis is often required for the purpose of preparing tax computations as

LEXISNEXIS

Self assessment ― amendments and corrections

Once a self assessment tax return has been filed, both HMRC and the taxpayer (or the agent) has the right to make changes to the return. There are different time limits depending on whether it is a correction by HMRC or an amendment made by the taxpayer.CorrectionHMRC has the right to amend the tax

LEXISNEXIS

Taxable state benefits

The majority of state benefits (also called social security benefits) are managed by the Department of Work and Pensions (DWP) via the Jobcentre Plus.Some benefits are dependent on a national insurance contribution record (and different classes of national insurance provide different benefit

LEXISNEXIS

Investors’ relief

Investors’ relief is a capital gains tax (CGT) relief on the disposal of qualifying shares in an unlisted company. A taxpayer making a disposal that qualifies for investors’ relief will pay tax at a rate of 10%.Although it is a separate relief, the rules for investors’ relief were intended as an